Posted by SueC on March 02, 2001 at 12:55:37:
Sounds like he’s not motivated and asking you to pay at or over market for the property. And you don’t know what kind of work or maintenance it needs inside. Get some comps before you offer him anything, and then make that offer contingent on a thorough inspection. Don’t jump just because it’s “owner financed” - that doesn’t mean there’s a deal here. After you figure out what the market value of the place is, figure out what your cash flow will be - sounds like about zero as it stands now, with your only profit being appreciation - also probably zero, just as the market turns down…
Search the archives here for posts on cap rates to help you figure out how to run the numbers. Good luck.