Is this a good deal?

[Dennis Coley]

So I contacted a FSBO today (she has not marketed the property at all except to put a sign in her yard). She is a widow that is motivated to sell in order to prevent having to keep up the property any longer. She says that she just can't do it any longer and just wants to move to a townhome. The house has no mortgage on it. The tax value is 158,000. She is currently asking 140,000 but says that she will consider all offers. The house needs no work according to her, but I have not given it a walkthrough as of yet. If she is indeed correct that the house needs no/minimal repairs, I was thinking of seeing if she would accept a 90-day option contract on it for 110,000-120,000 so that I will have time to line up a buyer and do a double closing.

This would be my first deal, so I would welcome your thoughts on this deal and any problems I may be setting myself up for.

Thanks.

[Justin S.]

Dennis-

When the homeowner owns the home free and clear, it gives you a lot of options. I personnaly would present multiple offers to her and then let her chose the one that works best for her.

For example:

Option A: Full Cash Offer at 65% of FMV, guarenteed10 day close.

Option B: Full Cash Offer at 80% of FMV, Option to purchase in 45 day close.

Option C: Owner financing at 90% FMV, Interest rate shall be 6%, 5 year ballon.

I just made these options up, but if you give her options she may be more open to that versus a single offer.

Think about your exit strategy with the property as well. Good luck, it sounds like you could create a win-win situation. Plus follow J Scott's advice, get proper comps before you do anything.