Deal or no deal

This is a scenario im working on. Any guidence, thoughts and knowledge welcomed as i am a begenniner Want to know the best way to structure this one? Flexible Flexible seller.

SFH balance $87k @ 9% 2 year arm adjusting in one year. Last appraisal one year ago was $ 190k before she added a $10,000 garage. owner borrowed approx 45% for ltv, Asking $150k Owner has become a dont wanter to much upkeep and has lived in the home for 30 plus years. Single Women. To much house 1,400 sq ft and .47 ac. For gen comparable sales @ $185,000 to $ 215,000

I believe the home could rent for $1,000 in the area, leaving aprox $100 a month cash flow. With me managing it. My out is to give the place a facelift piant, landscape as it is a solid home for the area. Approx $10,000 of improvements. Then sell or refinance in one year. Based on market at that time. So can anyone let know if this is a Deal or No Deal? Or could it be a deal?
Thanks again.

This is a complete loser as a rental. Your mortgage payments alone based on the asking price of $150K at 7% for 30 years is right at $1000/mo. There is absolutely no way this will cash flow with the numbers you have listed for asking price and rental amount. What about property taxes, insurance, maintenance, repairs, vacancy factor, utilities while vacant, etc? Even if you manage it yourself, these other costs will eat you alive.
You might be able to make a little money on a rehab, but consider the current state of the market with numerous foreclosures stacked on top of an already large inventory of homes for sale in many areas. What are your carrying costs going to be while you reahab and have the house on the market? Will you be able to make a profit big enough to be worth your time after you pay closing costs, realtor fees, etc?
Do a search using the button at the top of the web page for the “50% rule.” This is a rule of thumb that estimates real world expenses for rentals. There are tons of posts on this. You’ll soon see why the deal you described won’t come close to working as a rental.


  Here's how I se this deal.

                  Gross Rents- $1,000

Operating expenses- - $500
Net operating income - $500
Mortgage- - $1,000

               TOTAL-    NEGATIVE $500/MO.

The operating expenses are 50% of the gross rents. A general but accurate guideline to use. If you try to to flip it in a down market, you will become a motivated seller or be forced to rent it out. Both will cost you a lot of money. Also, if you’re putting $10,000 into rehab, your mortgage will be about $1100/mo. That will put you at NEGATIVE $600/MO. NO DEAL!

Ask her what she owes and see what happens. Otherwise, I wouldn’t even consider this, and even then, not as a rental, but as a flip.

For both thouts rent/rehabb? The rental i know was tough, and you guys confirmed that for me. THANKS,

Im working on this one because i have a motivated seller and I believe about 30 to 40K in equity before clean up and tlc $10,000 budjet, The place is solid but needs attention. The area is solid with home owners, and good area. Good features for buyers. My intentions are to min feed myself on my first deal like this, as the first is the hardest. Shes asking $150k I believe she would sell for less, $125 to $130k would be my offer.

I have a possible buyer who has cash for a down payment,$ 15,000 who also could do some of the rehabb as part of the deal. I would like to know of any creative ways to make this work with of course little to none of my money. I think it has possible life as a deal.

I do take all your knowledge, advice and experiences and use it. So please any and all ideas are appreciated.