Buy this 100$ seller finance or NOT?

[Lior Reich]

Hello to all,

looking for a YES / No straight answer for this property:

Area - Rochester NY

SFR - 3/2 1200 Sqf

Rent 825$ - 410$ section 8 and 415$ cash from tenants (tenants have been at the property for 2 years)

Purchase Price - 45000$

Fair Market Value cash price 35000$

100% finance terms:

no prepayment

5 years interest only at  7% - 270$ a month

15 years principal + interest at 7% - 420$

property real estate taxes- 2000$ a year

Insurance - 700$

Management - 10%

what do you think?

[Paul Bowers]

Unless I'm looking at something wrong this deal looks horrible.

Rents: $825 x 12 = $9,990

Expenses: $2000 taxes

$700 insurance

$990 management

$5040 mortgage (after interest only period)

$8,730 total yearly expenses

$9,900 - $8,730 = $1,170/12 = $97 monthly cashflow with absolutely no consideration for maintenance, CapEx or vacancy.

What am I missing?  How is paying 30% over market price and 2-3% over market interest rate for a property with no cash flow a deal?