Utah county 7 bed investment

[Laura Johnson]

Advice wanted on a possible Utah county off market deal.

I have a 3850 sq ft house, 7 beds, 3.5 baths, built 2001, great neighborhood. The average house at 3150 sq ft and 5-6 beds, in this neighborhood sells for $440k-$470k. Another one the same size/layout but with better updates (hardwood floors, updated cabinets, etc, but no option to househack) appraised at $505k in January. 

The house is in great shape. It needs the entire interior including doors painted. The entire house has picture window wainscoting throughout. Nice window casings. Very classic details. To flip I would paint the honey oak cabinets. To rent I may not, they are in decent shape just outdated color. It has solid surface countertops in the kitchen. Carpet is in good shape just needs cleaned. The basement has been soundproofed between floors and has a nice full size kitchen, it's nicer than the upstairs kitchen with granite. And a ground level walkout. It would make a fantastic househack. The yard hasn't been taken care of in several years, just bare minimum. It makes the house look crappier than it really is. 

I am new to RE investing and don't have lots of cash to invest. I am going to approach them with a seller finance deal. They have already moved and don't need the money right away, they just want to be done with the house.  I can't househack as I'm currently househacking and we are starting our refinance to drop pmi, and they ask if you are staying in the home for a year as owner occupied. 

So I'm looking at my options with this house. The owners paid $395k in 2015. It's definitely went a little downhill since they bought it. I'm leaning towards offering 405k-410k with owner financing. We would pay for a RE attorney to draft paperwork. Can I flip a property if we are doing the owner financing? I'm not sure a 7 bed is a good buy and hold: most everyone who rents it will have LOTS of kids which can be a lot of wear n tear. 

I know it doesn't meet the 1% rule, nothing does in Utah. It also doesn't meet the 70% rule for flips, but is that happening in Utah either (I would need to pay $350 for a $480 house, that's a huge spread for something that only needs paint)? The only downside to flipping that I see is the realtor costs (6% of $480k would be almost 29k, that's a large chunk). I just need someone that is looking to house hack that I can flip this deal to 😂

So, are the numbers too tight? Is this even a viable deal? What are my options to do with this house? 

Thanks for reading my long post!