Deal analysis

[Sean B.]

Hello,

Looking at a 2 flat deal right now in Chicago. Seller has both units rented out for $950mth and there is an illegal basement unit that rents for $550 mth. There is about $100k left on the mortgage and mortgage payments run $1000 mth and taxes are $6300yr. Retail value is about $375k and I was thinking a cash offer around $250-275k. I would like to go the route of offering a couple different options to the seller, maybe something having to do with a land contract to wrap current mortgage, but not sure how to best frame it up. This would be my`first real deal, so I would appreciate any feedback!

Thanks.

[J Scott]

Originally posted by @Sean B.:

@Sharad M. there is always a deal...I just need to uncover it.

If I were to write a post about common misconceptions in real estate investing (or any type of investing), this would be in my Top 5...

There isn't always a deal, and believing that there always is can make you do things you shouldn't do. There are plenty of houses I wouldn't take for free.

Now, I'm not saying you can't make this particular property into a deal...but if I were you, I'd be focused on trying to get it at somewhere around $175K or less to make the numbers worthwhile.