I think I made a mistake...should I back out and lose $1700?

[Emily Allred]

We are newbies.  Like typical newbies, we're stupid.  We're about 3 months and 1.5 properties into this biz, and realizing just how inexperienced we are.  I just stumbled across biggerpockets (which is amazing!!!), and am realizing that we are locked in to buy a house that, by no definition, is a "good deal."  I mean, it's a fine deal.  If i were buying it to live in, I'd be totally pleased.  But for rental income, I now realize it's not that great of a deal.  We're set to pay $132,000 for a house that's going to rent at $975, and appraised at $135,000 (original asking price was $160,000...which is part of why we THOUGHT it was a good deal)      

In a crazy turn of events, our LLC partners just backed out of our newly-formed LLC last night. Techinically, we can still afford to buy this property. But not without much belt-cinching. So my question is this--should we back out while we can? We'd lose the $1000 earnest money, plus the $700 we've paid for appraisal and inspection. The realtor says that's all we'd lose.

Our lawyer says it's up to us.  Now that I realize that this house isn't an amazing deal, I'm thinking we should back out, and wait for something better.  But losing $1700 sounds painful. And interest rates are going up, we're locked at 4.25%, which some peeps predict is the lowest it'll be for a long while.  What should we do?!?!?!

Any thoughts/suggestions/advice would be greatly appreciated!

[Jonna Weber]

@Emily Allred -  There is no right answer here, but in the $130s in Boise right now is pretty rare.  I have several buyers that would probably pick up where you left off if you walk.  Did you make the offer assignable by chance?  Have you already signed off on inspection?  If not, there is an opportunity to renegotiate at that point as well.  Overall, Boise is facing an inventory shortage and you could possibly also be in a position to put a little sweat equity into it and sell in Summer if needed.  No guarantees, but homes in Ada County under $200k are flying off the shelf.  If it is in neighboring Canyon County...numbers are different.