HELP!!!! Tips on my first property!!!

Hey all!

I am looking at a single family, 1922 house, 4br/4garage/2 3/4 bath with a nice deck that is listed for $154,900. Seems structurally sound and only some fairly cosmetic changes needed. It sold in 2004 for $240,000, was foreclosed on, and the bank really wants to get rid of it. It’s in a small town that I normally wouldn’t invest in, but I know a gentleman who wanted a similar property to rent, looked at the property today and loved it.

He has bad credit due to a divorce that has frozen his assets until August, but is willing to give me $5,000 in advance (so he says) to rent the house if I buy it as soon as his social security check comes through (he’s in my town for medical reasons - Mayo Clinic). Says it should arrive any day. He is interested in buying the home, but can’t make it happen until he either has his money or credit back. He is 58 and seemingly very intelligent, but I as a rule don’t trust anyone.

A couple of questions: What should I offer on the house??? How should I structure a safe deal with this gentleman?? What is the most creative way to make money on this deal while still protecting myself and being fair to him??? He is not only interested in buying this house long term, but also interested in investing with me in other properties as well when his divorce finalizes.

Thank you for any and all advice!!!


Based on the info you have provided, it sounds like your buyer/tenant will be your un-doing. Reconsider doing the deal at all.



You didn’t provide the most important information - THE RENT! Operating rental properties is ALL ABOUT THE NUMBERS. Your maximum purchase price should be based on the market rents for that house. So, if you want to know what the maximum you should pay for the property, we need to know the market rent for this property and the total for the repair budget.

Good Luck,