HELP!! To buy or not to buy… - Posted by Nate
Posted by Nate on December 30, 1998 at 01:46:14:
You guys (and gals!), I really need some advice.
I know few if any of you are familliar with my area, nor the property, but see if you can gather an opinion based on what info I give you…
(Keep in mind this is my first deal)
gross rents $2,400/mo
avg. expense 500
Here’s what’s been accepted…now it’s in my court:
Purchase price $161,000
Assume 1st @8 141,000
2nd @8% 15,000
Cash Down 5,000
Seller seems a bit naive, but could be a good actor…
I tried to pull comps, but it’s a very unusual property (An old big home converted into apt. units), so I really couldn’t find anything comparable. Dry rot & pest report is OK.
My local realtor (hasn’t seen it) strongly suggested that I get an appraisal done “for peace of mind”, but I really don’t want to sink $800 into an appraisal…
He hasn’t had any problem keeping it occupied, but it is low income housing (not the nicest units, but not terrible).
As it sits, I’d be looking at a positive cash flow of well over 500 or 600 a month.
I’m nervous because it’s my first deal, but it SEEMS like everything looks good.
He hasn’t tried too hard to sell it, claiming that he “really doesn’t care if he sells it, but he thought now might be a good time to try considering how low rates are.” He put a tiny ad in the paper for a couple of weeks then quit.
The tax assessed value is 181,000, but I know that really doesn’t mean much.
He told me he hasn’t gotten an appraisal on it himself…ever
He’s only owned it for less than a year–bought from an old man (70’s) who’s owned it for 40+ years.
I called the previous owner (and note holder) to inquire about a cash discount on the 1st, and he did mention things like “he really felt like he gave (the current owner) a great deal”
Just tidbits of info…
What would you folks suggest I do???
I’m afraid I’m passing up on a great deal–considered tying it up and flipping it, but it may be something worth keeping…? Is this too much “landlording” for a newbie?
Many questions, a bit flustered.