I need some advice on a property with possible negative equity

[Chaz Edwards]

Hey guys, I have a question about a seller I’m working with. I found a house D4$ and got in contact with the seller. 

The house is in good shape, needs A LOT of cosmetic work and some mechanical work. When I initially spoke to the seller she stated that they were upside down on the mortgage and had out about $30k into the repairs so far including HVAC, electrical, and plumbing. None of the jobs are finished. She was very forthcoming about everything. She and her husband have to find out exactly how much is left but from what she was saying it could be anywhere between $100k-$120k on this house. The ARV is about $166k it's gonna need at least another 15-20k to get it ready for at least a renter. There's obviously the possibility of not being a lot of meat on the bone especially from the aspect of wholesaling. What recommendations would you guys make as far as exit strategy for this one? (If they are indeed under water at 120k) Or is it even worth dealing with, I want to help this couple out even if I don't make a lot of money in the deal. Open to suggestions.

[Edward Liu]

As landlords, we must consider rentals as a business.  Sometimes we have to be cold hearted, although we might feel bad for tenants, previous owners (in this case), etc. So many times my Property Managers told me stories of tenants behind on rent due to job loss, drug issue, family death, you name it.  Half of the stories are likely true, but we still evict them.  Only time we allowed tenant to laps on rent for long period was one tenant had medical emergency and was in the hospital for nearly 3 months (obviously no rent).  I did not evict him so he has home to go to after hospital, allow nearly 18 months for him to catch up on rent.

I would only offer what I would normally offer for this type of deals, no different vs. other deals.  If you treat this seller differently, then you probably will treat next tenant as your cousin, and treat next buyer of your property as in-law, etc.  Just trying to be brutally honest.