Don't want to pick the wrong financing

[Thomas Larsen]

Hello all, I'd like to get some basics out of the way but I'm hoping for some feedback for my first potential deal.

I live in little Baker City, OR where the property is. I have family, friends, and some connections over here. When I work in WA I live in my fifth wheel with my fiance and 2 dogs.

23yo

$140k gross income

I'm a traveling utility foreman 20% work in eastern OR 80% western WA

$24k savings

$30k stocks which I plan to sell in a few months (2nd market scare from COVID-19)

$12k I can borrow from ROTH IRA

$7k if i refinance my travel trailer 3.5% (paid off)

$60k of credit lines

I found the deal through a friend's mom who's a property manager. The guy owns a 2 bed 1 bath built in 1920 on a corner in town 1200f² and 6000f² lot 2 off street parking spots and rents it for $660 but lives 4 hours away. He bought it for $49k in 2015. Older guy and doesn't want the house anymore. I believe I'm the only one he's talking to so far. I can get $700/month out of it, maybe even $750. (He couldn't raise the rent anymore due to Oregon rental raise laws, +7% annual) He wanted $70k but I talked him down to $60k. (thanks to Chris Voss' Never split the difference) He has agreed to 10k down 15y 5%. Nothing is in writing yet but I think if I pay cash I could get it for $55k. Paint is peeling on the outside but he's agreed to paint it for me if we continue but he's going to paint it even if I walk.

Now here's the kicker...it is missing foundation on about a 10ft x 25ft area where they added the bathroom and laundry room. I believe it's on piers but not sure. I will be looking at it again sunday because I went to school with the tenant and she will have all her stuff out. Got a rough quote from a highly recommended foundation guy for $150/ft so (10+20+10)×$150=$6750. I estimated the monthly expences would be $280/month without a property manager. Rehab costs would be 1000 for inside paint and other little misc things, closing costs would be $1000 to overestimate. At the agreed terms I would cashflow $24.60 but if you include a property manager it will go negative.

I'm stuck on 2 different ways of doing this deal. The first is taking the owner carry and then fixing it up, adding foundation and getting it refinanced 30y fixed so the cashflow would be closer to $150 and the CoC ROI would be huge. That is if the property would refi. I think I'm just scared it wouldn't refi for some reason because I know nothing about what they are looking for and it is an old property.

The other option would be to get it appraised before I buy it but that would have to be after he paints it. I could then most likely get in for $55k but since this is my first home idk if they would approve it because it needs work and I have zero experience. I dont think I want this deal if I cant finance it. If I paid $55k it would CF $420 but CoC ROI would be 9% and I would have $55k sitting there and I couldn't get it out. (Unless there's another way I dont know about.

I would love any advise or criticism about this deal.