Needing some extra advice on a potential deal

[Bernard Sims]

My realtor has presented a deal and would like some advice. This deal is a 6 unit 2-bedroom complex. Asking price is $260K. Much work is needed to get to a potential ARV of $447K (skeptical on this value, but owner claims it's based on a recent renovated 8 unit sale across the street)

Potential rent of $650 low side; $800 depending on reno

Potential finance options:

1. HML - no down payment, only closing costs that go around 6 to 8% of loan, Loan covers 100% of purchasing cost and most, if not all, the rehab cost up to 70% of ARV,

6 to 12 month loan. interest only at 13%, refi to conventional afterwards

2. Conventional Bank Financing: Up to 80% of the cost of purchase and rehab. 5% to 6% per year, 20 to 30 year amortization available. 

Sales Rules:

 1) $5000 non refundable to lock contract down

2) No feasibility or option period offered, please do all feasibility prior to contract assignment

Really interested, but not sure if it makes sense to do. Would def prefer to go HML route. With a purchase price of $220K-$230K

Some seasoned advice is definitely warranted.

[Nick Bennett]

Hi Bernard-

I read your post, and my suggestion would be to do your own homework. 

The real-estate agent has the incentive to what?....get a sale...so even if they are acting for you, their best interest still comes first.

The owner has the incentive to sell, so he ran some numbers and found what makes his price appealing.

Find local sold comps in the area yourself, Zillow or MLS oand search the exact specs on the property you are buying against what has sold. Look at the price per sq ft and apply it to your property.

I would trust NOBODY but yourself with your future.

Nick