Need Help With Owner Finance Deal

[Victor N.]

This contractor I met when he came to give me a quote on a new project, offered to sell me a 1BR condo he owns. I said I would only be interested if it is owner financed and he agreed.

Asking $55,000 which is close to market value. 

records show he paid $49,750 in 2012

condo fees: $136/ mo ( includes exterior maintenance and cold water)

taxes: $120.33/ mo ( $1443.82 annual)

Insurance: $12.08/ mo ( $145 annual)

He is asking 10% down and 10% interest rate

Condo is currently rented for $650 

Electric heat ( paid by tenant)

2 parking spaces

What do you guys think about these numbers? We are currently working on scheduling a showing of the property. And what's the next step if we agree on the terms ( I plan on negotiating the price and interest rate)?

[Ellis San Jose]

Originally posted by @Victor N.:

This contractor I met when he came to give me a quote on a new project, offered to sell me a 1BR condo he owns. I said I would only be interested if it is owner financed and he agreed.

Asking $55,000 which is close to market value. 

records show he paid $49,750 in 2012

condo fees: $136/ mo ( includes exterior maintenance and cold water)

taxes: $120.33/ mo ( $1443.82 annual)

Insurance: $12.08/ mo ( $145 annual)

He is asking 10% down and 10% interest rate

Condo is currently rented for $650 

Electric heat ( paid by tenant)

2 parking spaces

What do you guys think about these numbers? We are currently working on scheduling a showing of the property. And what's the next step if we agree on the terms ( I plan on negotiating the price and interest rate)?

Gross Rent:    $650

vacancy (10%)       -65

expenses (40%)   -292.50

HOA -136

______________________

$156.50 NOI

$434.40     (monthly payment assuming fully amortized 10%, 30 yr term)

negative cash flow = -$277.90

What do you think about the numbers?  I know I don't like them.