Buy and Hold Deal

[Tom Keith]

Hello, I wanted to see what is thought about a deal I am working on at this time. I received a call a couple of weeks ago from an owner wanting to sell his home. It is a SFR IN east Texas and he wanted too much to begin with. He wanted 60K and after looking at it one night, very quickly, I told him the best I could do was 40K. I gave him assistance on trying to sell himself on Craig's list and post lets. I would have to replace rood, HVAC kitchen flooring, cabinets and try to move W/D connections to Carport storage. Currently tax appraisal at 58K which is average for the street and immediate neighborhood. If I do the above changes I can get $750 a month without a problem. Well this morning he sent me message that he can sell and needs to sell for45K. This will cash flow at $128 monthly at 45K.

Purchase price 45,000

Repairs.  10,000

15% down and 5% on 20 years. 

I did analysis but do not know how to upload it on my IPad.  

He is going through depression due to divorce and was to to sell. But he needs some money to get on his feet.  He has a loan or mortgage for 35K. 

Thanks

[Jerry W.]

Hey @Tom Keith.  I do not know what is normal for your area.  For me it sounds like a pretty good deal.  I am buy and hold myself.  I recently bought a property for $55K then had to put about $4K into it just to make it habitable. I was thrilled to get $750 per month.  The thing I would stress is can you resale it for more than you have into it?  If you are spending fix up money I want it to truly add value to the property.  Maybe you can get him to do a contract for deed and use his financing for awhile to save you some more money.  Anyway good luck.