Turning a bad deal into a good one

[Dedrick Williams]

Hi everyone on BP. I'm in seek of an idea on how I can turn a bad deal into a good one. This is the situation. There is a landlord here I'm Houston that has three turn key properties for sale. They where once 3 bedroom 1 bath single family homes. He converted them into 5 bedroom 1 bath homes. He is renting them from 1400-1500 per month but they are not in a good area of town so he has only section 8 tenants. A regular tenant will never pay that amount for the area. Comps are 800-900 a month. He wants to sell but he wants way to much. He's asking 99k for a 65k house and he is very stuck on this price point. He already had one bank financed loan fall threw after the bank ran the appraisal. These homes have been on the market for 110 days and the agent says if he can't get a buyer at the price he wants, he will continue to rent them to section 8 tenants. 

Here's the deal, I want these properties because they are in a gentrification area and I think if he is presented with a reasonable cash offer for all three properties and I can solve his current tenant eviction problem he may go for it.

I will greatly appreciate any thoughts or comments

Thanks

[John Chapman]

Wow.  I cannot fathom a situation where I would want a 5 bedroom/1 bath house with overmarket rents in a bad neighborhood at an inflated price .  (At a 65k price point, I suspect that neighborhood is a long way from gentrification.)  I agree that maybe there are some crazy financing terms you achieve that make this profitable, but I would ask whether this type of house is the type you want to manage.  Wear and tear on these properties will likely be huge.   Sounds to me like you are trying to force the deal.