What to do with a deal

[Chandra Donnell]

Hello BP community, a connection I know is selling their house. They want to put it on the market by the end of the week with the reasonable asking price for our location at 389,900.  The owner could probably make 385,000 (minus fees) for the house this way. She is offering it to me "by owner"  for 335k.  I think I could perhaps ask for 10k less than this too.  I already own (I pay the mortgage) of my own house in the same neighborhood.   The options that I see (I am sure there are more) are:

1. Buying and living in this house and renting ours (can't put 20% down on this new purchase... 10% would be possible but very rough to come by)  each property could rent between 2k to 2.2k per month (maybe a little more)

2.  Try to "whole-sale" it.  Although I have only recently heard of this concept in the last few months and do not feel confident in it. 

What would you do if you were me? 

[Greg Miller]

I have been to Bozeman before...great ski country!  One piece of advice, you must live in the house for 2 years and 1 day for it to be considered your primary resident.  Otherwise, you will have a different tax situation when you to sell it.  You have value add of $27,000 by taking the $335,000 offer vs. $385,000 market price.  Remember, the 1% rule...you need to earn at least $3,350 per month in rent ($335,000 x 1%) in order for the finances to work at a very high level.  Therefore, I would rule out option #1 and look cautiously at option #2.  Best of luck!