Need help on what I should offer for this deal

[Gerrell King]

Hey BP Family! I’m new to RE investing and this is my third attempt of doing a deal and could use some advice. I’m in talks with an investor that is looking to sell his rental property and I’m not 100% sure on what I should offer. Details: -4 Bed 2 Bath -1296 sqft. -Built in 2005 -C List neighborhood. Not a war zone but has a high crime score on Trulia, mainly theft. -ARV: $428,970 -Asking Price: $439,800 (Price reduction from $450,000) -Average price for homes sold in the neighborhood his $402,000 -Been on the market 95 days -Currently has a tenant and their lease ends Jan 31, 2018. -Seller purchased the property in 2015 and made upgrades to the kitchen, bathroom, and floors before renting it out. -I haven’t seen the inside because of the tenants. After speaking with the seller he stated that he would like to sell the property to buy his next property but is willing to do a lease option. His requirements for a lease option are: Terms: 2 years Down payment: 5-10% Monthly Rental: $2,750/mo (Current tenant pays this now) The exit strategy I’m considering for this deal is a Lease Option with another buyer. I’d be finding a buyer interested in a 1 year lease option and using their down payment to cover the initial down payment. When they exercise their option to purchase, they’d be paying me enough to pay the original seller and make a profit for myself. Any tips, thoughts, advice, or guidance would be highly appreciated! Thanks!!