A property owner approached me with this deal. Sounds good but need your advice on how to go about with the deal because hard to get comps for area. It is a rental property-duplex. Both sides occupied for past 5 & 7 years. Good tenants. Rental income 1050 for both sides. Property owner wants 67K. I want to do an assignment on contract. Per a realtor, in past 6-8 months only 2 homes have sold in this particular area. First house-sfu across street sold for 159K (frame home knocked down previously and was rebuilt as a brick home 3-2). It sold a little over 6 months ago. The second home sold in October for $83K. Smaller duplex but also a rental property. Any suggestion? Is this a good deal based on those two comps only? I also want to know when assigning a contract, who pays for the taxes and closing cost?
rule of thumb: regardless of what the realtor says, run your own numbers and due diligence.
always go 40% below the appraised value to be “safe”. there might be some undisclosed repairs that needs to be done, liens on title, etc. just remember to have an EXIT STRATEGY.
when you assign you have to remember you are only tying the property on paper, you don’t really own the property. you are selling the paper to someone (assigning) and they pay the taxes & closing cost.
in terms of this property being a good deal, it seems like a good deal, but make sure you have a clear title before you contact the homeowner.
hope this helps :biggrin
Rocks- Thank you so much for responding to my inquiry. Yes i’m being very careful about this deal. Seems good but because will be my first…well you know how it is about us newbies with our first. No liens exists on this property. Free and clear but property owner wants to pay off a debt he has on another property with the sale of this duplex. He’s moving out of town. Once again thank you for your advice and words of encouragement…you said it sounds like a good deal right. I’m doing my homework! :biggrin
This property might very well be a good buy and hold, but I don’t know about there being enough room to wholesale it.
You should consider any deal that you have buyers for. Remember you don’t necessarily need to have the home under contract to determine if your buyers wants the home or not. Simply call the buyer and run the deal buy him/her giving them your potential numbers rather than the actual sale numbers. This is a touchy technique but I have made alot of money using it.