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Updated almost 6 years ago,

User Stats

189
Posts
127
Votes
Matt Hurley
  • Ypsilanti, MI
127
Votes |
189
Posts

[Calc Review] Help me analyze this deal

Matt Hurley
  • Ypsilanti, MI
Posted

Hey BP crew, I need advice on negotiating my first potential off market deal:

  • SFH, will rent for $2,100
  • Comps @ $330k after a lipstick fix up (max $5k in paint and a little carpet)
  • Property will only cash flow if I have a total mortgage of $192k-$200k 

That's a big gap to cover. What I know about the seller/property:

  • Rentals fill in less than a week, properties in this area regularly sell for 10% above asking price with 8 offers
  • The owner wants "as much cash as possible" out of this deal to assist in buying their next house
  • They inherited the house and they're selling because they hate being landlords. Attempted to rent the place out but evicted 3 people in 2 years because they don't know how to vet tenants properly
  • There is a mortgage remaining of about $80k

I know I'd be swimming up stream on this negotiation, but let's do a thought experiment: how would you approach this deal? My  current hit points:

  • $5k in in repair cost
  • We'd close using my private money and hard money contacts, so no commissions for her to pay, much lower closing costs. 
  • Her tenant's lease isn't up until August, I could close now and inherit their tenant
  • I'm funding with private money, so closing in a few weeks vs. trad buyer taking 2.

I've already presented a seller finance option, but it sounds like she wants more up front cash. Thoughts appreciated, thanks crew! 

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