Option For Financing Great Deal

[Derek Dewayne Hopson Jr.]

Hey all! 

Although, I've commented on other posts, I think this is the first discussion I've started here on the forum. I need opinions and help on what has fallen into my lap. Lately(probably the past year), I've just been randomly posting on Facebook on how I want to purchase my first rental property in 2020 after I get my finances right.

Without even asking, one of my ex managers inboxed me and offered to sell me his rental wayyyy below Market value for $65,000. He is moving to another town and doesn't want to manage a property in another town. Its a 3 bed, 2 bath 2 story home in a major SEC college town that he currently rents for $1100 a month! Similar properties go for 120k-140k. The estimate on Zillow is $134,000. I'm going to stop by the Chancery Clerk's office one day this week and grab the property card to see what is the county value and property taxes. This a great deal, I just feel it in my bones. I know I have to act on it.

However, My finances are not in order. My credit is not where it needs to be and I know I wont get approved for a conventional loan. I might can get approved for an FHA loan. My credit is so terrible that I might not get approved for the FHA either. I only have a $1000 to my name above my monthly expenses. So I need opinions on what to do. I see my options are the following:

1) Apply for an FHA loan, pray I get approved and live in it in a year?

2) Find a hard money lender who will finance for a year or two till I can refinance? At worse I could sell it if I can't get it refinanced. 

3) Find a partner with good credit to go in on the deal with me?

4) Try to wholesale it? (I don't wanna offend my friend who is giving me the deal though)

5) Just let it go. Another deal will come when my finances are right.

What do you guys think? I appreciate any and all feedback.

Thanks

[Derek Dewayne Hopson Jr.]

Hey just giving you all a quick update. He's going to let me rent the unit personally for a year till I can get financing. A Rent-To-Own agreement at reduced rent of $800!!!! He normally rents it for $1100.

All I have to do is clean, perform minor repairs, and paint the property.  His last tenant just moved out and left the place trashed. I've already started cleaning it today. Also, I have to pay for normal utilities that he would normally cover for another tenant like water and sewer which also reduced the monthly rent. Also, I agreed to handle any repairs under $1500. He says he really is just tired of maintaining tenants. I told him I'll take care of the place like I own it and he won't hear from me unless it's something major. 

He is being more than generous. He said he really wants me to have the property so he is helping me out big time. I'm going to move in it because my lease is up soon in July. My goal is to get my finances in line to get a traditional mortgage or find a partner before the lease is up next year. 

I gotta be patient, but a year from now I think I'm going to have my first rental.