There are a couple of variables missing but lets give it a shot.
The owner has given you the balance left (90,000). He is looking for 20% down and is asking 159,500.
Not knowing what your credit looks like this is what I would do.
Find out what the tax value is.
Talk with an appraisor to confirm true value.
If value is there, say 200,000, then do this;
20% of 159,500 is 31,900 so if this is what the seller wants give him 31,900.
Make an all cash offer of 127,600 because you know the balance.
Offer to pay all closing costs because there is 5,700 left over. 127,600 - 31,900 = 95,700 (pay off 90,000).
0 down because it’s an all cash offer.
Close in 15 days with private funds if possible.
After close refinance at 200,000.
30yrs. @ 8% = 1,467.60 per mo. PCF of 365.73
Walk away with 72,400 and a smile.
Here is my problem. I am unable to tell whether or not this deal is any good.
Property is being sold for 159500.
Annual Rent is 22000.
PITIU is 16000.
Owner states there are no leins against property and has owned it for 13.5 years. States that aprox mortgage balance is 90000.
Comps in the same area and street even range from 180000 to 220000.
All 4 rooms are rented and have a year lease on it. Owner is selling because of a move out of state. Owner also states that is willing to work out a deal that would provide a win/win situation. Has even offered to owner/fianace w/ 20% down, interest at 12% and balloon in 5 years. This to does not sound good at all. Conventially I could purchase with little down and still, and if my figures are correct, could still clear 500 or so positive cash flow. Am I missing something? Please help and any and all suggestions are welcome.