What would you do in this situation ?

[Chris Seveney]

I am looking at an off market deal which is a duplex. The owner needs to sell because they are in a financial crunch. In the short term she was also considering leasing it because of her desperation for Money. The home was listed on the market but was overpriced and needed work (listed at 100k and worth 75k) While preparing to make an offer with my agent, my agent just was advised the owner (went around her leasing agent back) and is in the process of leasing the home to a friend for $550 a month for both units (person moved in but has not finalized lease). The going rent for the home is $800 for the 3BR unit and $400 for the 1BR unit. The owner now notes she will sell the home but with the current lease in place (lease has yet to be executed). Based on the current revenue, what would you do - walk away - base offer based on current rent - or base on actual value ? My fear is with tenant in there and house needing work they will be a pain and constantly want things fixed and attempt to get reduced rent and then have to deal with trying to get them out in a year Thoughts ? Thanks