Please analize this deal

[Richard Rolle]

Hello,

Trying to figure out how to take down this deal and I'm looking at a Subject to plan.

FSBO property. I know they want out to move and make a little profit. House next door has been rehabed and is for sale, so they know how they compare and are in a rough spot.

Original Mortgage was ~$95K and they are 5 years into it 5.25% interest rate. Monthly payments are $800.

Looks like it needs about $15K in rehab and they would need about $10k cash to walk away. ARV would be $125-130 with neighborhood improving.

I could rent it for ~$1200 or lease option it @8% for a 2.75% spread.

Good deal or bust?