What Would You Do? Solve This Real Estate Scenario

[David Kilgore]

Hello BP, I am a teacher in the state of Georgia. During one of my math lesson's I had an epiphany. In my class I have my students come to the board to solve a problem. With all the different math strategies these days, kids are able to solve the simplest problems using a wide variety of alternative strategies. Some that work better than others, it usually is dependent on the type of learner you are. Anyway, once my student solved the equation, the other students in the class all had an aha! moment. All the students loved the strategy that she used because it made solving the equation so simple. I thought to myself, students sharing with other students can be incredibly beneficial during the learning process! Why am I not doing this on biggerpockets!? I could post a hypothetical real estate scenario and see how the rest of the community finds a solution for the seller. This would be a great property analysis exercise for us to go through and I am sure we would all learn something in the process. 

Scenario:

The year is 2007. The seller buys a flip for 115,000 right at the top of the market. He initially puts 5% down on the property and gets an interest rate of 8% for 30 years. The house is a 3 bed 1.5 bath ranch, 1300 square feet and is in prime condition at the time of purchase.

Fast-forward to now. The seller gets a new job and needs to move. He is current on all of his mortgage payments. However, property values in his neighborhood has taken a negative turn and have not benefited from recent overall market appreciation. Similar comps in his area are anywhere from $80-$110,000. Not to include the wear and tear his house has taken during the ten years he has occupied the property. The property is rental ready, but will take some work to get to full value. Repairs are estimated to be $5,000. Estimated rent that can be collected for this property ranges from $950-$1,100. The seller is asking $110,000 and is selling the home on his own. No agents involved. 

Given this information, How would you solve the sellers problem?