Good Deal? Leverage? Please advise

[Brandon Duff]

A guy is trying to sell his moms property. 

Local Properties are around 180k

He wants 175k

Mom owes 140k on the loan.

Downpayment they want is 5000

I have about 40k  ( leverage?)

Rent in the area is 1100

No Agent will be involved.

Zilpy shows:

 Rent Estimate (per month)$1,100 (0.73 /sqft)

Rent Low/High (25th,75th %)$1,000 - $1,350

Local Renter Density16% Renters

Vacancy rateLocal: 13.0%

Property Tax is just over $1000

They said they will charge 2% interest rate. 

My lender has me at 4.75% 

Cashflow should be around 154 for the place?

Should I just offer just above the loan? 

How does one do it without a mortgage? 

Clerks Office? Etc?

Would this be considering Wholesaling.. Reading this in No money Down book lol.

[Ned Carey]

This is not even close to a deal.  You have no equity and will have negative cash flow. 

$1100 month rent X 50% expenses = $550 a month to cover your financing costs and positive cash flow. 

If you put all $40K down you would have a $135K mortgage.

Your mortgage payment @ 4.75% would be $700. You are likely to have $150 negative cash flow a month.  Unfortunately you won't know it until an expense comes up you weren't expecting and then you are stuck.

I suggest you check out the beginners guide under the learn tab above to get some ideas how to evaluate deals.