What would you offer for this possible deal...

[Steve Muise]

...that came out of nowhere a day ago.

One of my customers for my FT work who own several rentals and knows I'm getting into the business contacted me about an acquaintance of his.  This guy bought a tract home in 2005 for $138K (built 2003) and later moved to a bigger home.

He's rented the house for 5 years (1 tenant in that time).  He wants to sell because he's getting a divorce.  Talked with him on the phone to get some basic info and he said the home was 1600 SF and he thought homes were selling in neighborhood for $135 - 140K.

My customer's wife is RE agent and she's going to check comps for me but I did search myself.

Subject home is listed as 1680 and 1350 SF depending on the source so I obviously need to confirm that info (did someone count the garage in the SF ?! )

Most recent comps from neighborhood I could find are (all with 2 car garage):

09/16 $138K 1245 SF 3/2

04/16 117.5K 1298 3/2

03/16 115K 1302 3/2

10/15 153.5K 1860 3/3

9/15 120K 1382 3/2

7/15 133K 1528 3/2

4/15 136.5K 1702 3/2

3/15 137K 1382 3/2

Homes in neighborhood were selling $120 - 130K new in 2002/03 so no real appreciation.  

Home located in Lexington, SC which is probably the most desirable suburb of state capital (Columbia) and has one of the top school systems in state.

Roof, HVAC, HW heater all original so I know they'll need replacing soon.  Have not seen inside but I suspect carpet will need replacing.

Taxes in SC are kind of funky in that owner occupied are about 1/3 of rentals for same property.  Owner told me taxes are $800 which is the rate for owner occupied and was confirmed by some of the sources I checked out.  Based on what I know, taxes for the house as a rental will be ~$3000

Owner said he'd be willing to negotiate - said he wants to get rid of it.  He wasn't even sure what the rent was just that the PM sends monthly check of $1035 which tells me rent is $1150 - $1200 which is market rate for area.

I plan on getting some more info and definitely do a walk through before considering an offer.

If I decide to make offer will ask what he wants first and then counter.

Those of you with experience - what do you think would be a good starting offering/max offer based on the above info?

Thanks in advance for your feedback.