Damn, I got this house I can’t sell, it’s not a bad deal, just not a great one.
Its a 3/2 1400 SF in a working class area & built in the mid 50s & never upgraded. My buyer Matt said it was too small, bathrooms are tiny and it needs too much work. Other buyers said they didn’t like it cuz it was on a busy road and didn’t like the area.
I got the price down to what the seller owes about $93,400 It’s probably only worth 140-150K after repairs, problem is, it needs 30-40K in rehab. The one great thing is, it has long term renters paying $1,200 a month in rents.
The seller is willing to give it to me and walk away, they live in Chicago about 2,000 miles away and they expressed it was difficult to manage.
I can pick this up with a long term Lease Purchase with no money, no qualifying, but, do I really want it.
It does have good cash flow after mortgage, taxes and insurance. Even with maintenance and repairs it shud pay for itself.
I could sell it with the lease option & get a 5-10K down or keep it for myself and wait for the mortgage to be paid down and values to increase.
What would you do?
Rando
Hi Rando,
If hanging on to this house can make financial sense without strapping your family keep it, if not and it becomes a financial burden (Albatross) then dump it (Sell it). Your ultimately the guy who has to make that decision based on what you know.
GR
This deal is looking worse by the minute. I asked seller for a copy of the rental agreement to prove she was getting $1,200 a month in rents. I was suspicious bcuz my brother rents a much newer & nicer home in a much better area for $1100.
The she seemed reluctant and admitted her last tenants were paying 1200 but these tenants are paying $1,000.
I finally got the rental agreement and it did indeed say $1,000 in rents but the date started in July 2014 and she told me the renters had been there for 3 years.
She also tells me the Mortgage payments are $720, taxes are $1200 a year and insurance is $400 a year.
So that 300 cash flow is out the window, now down to 100, and this house was built in 1952, things are going to need to be repaired and maintained, it needs a roof, still has the swamp cooler and gas floor heater and original old crank to open windows.
Can you imagine the plumbing and electrical and potential dry rot issues? What if I have a vacancy and then have to do repairs and painting and flooring b4 it will rent again? Just shoot me now.
I try to be optimistic but it’s tough on this one.
I may just get it and lease purchase it out for a 5K assignment fee and be done with it.
I know I can squeeze a profit out of this if I give it a half ass effort.
Let’s make some money…
Rando
I actually found an investor that wants this property, he even went and inspected it.
I had almost given up on it, but then decided to keep running the ads on Craig’s List.
Started escrow today, seller is willing to sell for the balance of the loan which is $93,300 and I had him sign my assignment of contract for $2,500
I’m happy to get that.
I luv these small checks too, a few years ago I thought 2 Grand was a fortune, now it’s just pocket change to pay the bills, fill up the gas tanks, buy some steaks and taters and do some more marketing.
Let’s make some Money…
rando