Any way this can work?

Tried to get our first lease option deal going, but the numbers just don’t look right. Is there something I’m missing here?

Market rent of half-plex $1000 -1200/month
Current tenant pays $1100
High-demand area, but in a declining market now
Seller asking $255k, comps are about 15-20k lower
Seller monthly payment is $1700/month, so he’s in $600 negative cash flow
Loan balance is $245k
Seller motivated but not desperate, wants to work with us is numbers can work out

I’ve racked my brains but can’t come up with a winning scenario here. Is this deal dead?

I would say the deal is dead. Why would you trade positions with him and pay him 20k over market value to boot?

Even if you just paid off his loan balance, the deal still looks like a dog.

The most I would pay for this is around $70K.

You need a motivated seller and equity. You have neither.

This isn’t a deal. This would be charity.