Investment Property opportunity assistance

[Ryan G.]

Hi All, and thank you for your help in advance.

I have an opportunity to purchase an investment property that is NOT ON THE MARKET yet. Here are some of its vitals:

- Zestimate: $345K (I know this is typically 10% or so high)

- Last Sold: 8/2021 for $281K

- Roughly 1400 sqft

- Some cosmetic work needed

- $25K left on solar loan

- The home was build in 2004 and it looks like it has the original AC unit, so I am assuming that needs to be replaced too.

- 2 story house with very small rooms and and 2 steps down, imminently as you enter the front door.

- Gated community and in a reasonable HOA.

- The home is 2 payments behind and already got a letter from the lender about future foreclose.

There are two options I have offered and I want to get a check on here if I am off base with my offer or if I need to push harder.

Option 1: The loan that the owner has is an assumable loan at a 3.875% rate and still has about $265K. I wanted to offer him about $50K over what is remaining on the mortgage and go through the 60-90 day process to assume the existing mortgage. That will have me in at about $320K plus the solar loan. The owner representative (not an agent, just family) seems to not be a fan of this option because he does not understand it.

Option 2: If option 1 does not work, or they are unwilling, the offer I see as valid for this property to make sense is about $290K plus taking over the solar loan. I a factoring in the replacement of the AC unit and potentially the water heater, and the cosmetic thins (I would do myself) to get it to rentable standard. I know this seems low, but the way I see it, this is how much the buyer would potentially walk away with if they posted it on the market and minus all the fees and concessions so I am getting them to that number with none of the hassle and removing the issue of a looming foreclosure.

Lastly, if I was able to get this home at that price below market, are there loan options that require little to know money down, since it is at/below the 85% LTV?

I would appreciate any insights and additional things I may be missing. I know that I do not know everything, and I do want to make this deal work, if I can.

[Jake Baker]

@Ryan G.

This sounds like a great off-market opportunity!

Confirm with the solar company if the loan is transferable and review terms carefully—it’s a potential hurdle with lenders or resale.

A DSCR (Debt Service Coverage Ratio) loan might be an option since you're focused on rental income. Many lenders allow for low-down-payment options if the rental income covers the loan.

You’re approaching this deal thoughtfully, but be sure to communicate the benefits of your offers clearly to overcome resistance from the seller's representative. Best of luck