Found a Denver Condo Deal

[Garry C.]

I was talking to a guy the other night, after a large group dinner, and he knew about my vacation rental condo business and asked how it was going. He then volunteered that he wanted to get out from under his condo in Lakewood, CO (Denver suburb). It's currently occupied, and he's 'too nice' and hasn't raised rent in a few years, so he's losing money. Plus, he has about $50-60k of equity in it that he wants to pull out and put into rehabbing his primary residence. 

Details:
2/2 with a study, 1350 sq. ft.
$238k value - will sell for $210k
$1800 local rents - currently rented through mid summer at $1100/month

He's in no rush to sell, maybe wanting to coordinate with the renters moving out at end of July, so I've got time to figure out what I want to do here. However, I'm thinking it might be best to jump on this sooner rather than later.

I've run the numbers and this seems like a good deal 'for Denver', although it might not be great in another area. My thoughts here are to grab a conventional loan, give him a check, cash for keys to get the renters out early (or just take a loss for a few months so they treat it well on the way out), do a quick cleanup and start renting it as the new rate.

Thoughts? Advice? What you would do in my shoes? Anything else I should be considering?

[Bill Hamilton]

Hard to say if it's really a deal. Even for Denver. What is PITI on it and more importantly, what are your HOA fees? I would tend to think this is not really a deal when it comes to cash flow but with all the figures you will have a better idea.