It might be a good idea to figure the value through comps from the area instead of just the tax assessors’ value.
How much equity do they have in the property? Will they accept some cash now and the rest later?
Find out the market rent for the area so that you have something to figure cash flow with if this will be rentals.
If this is 50 miles from where you live and you plan on keeping it you really need to consider if you want to have to make that trip each time something needs checked at the property. I am going with the notion that this is a long term for you so maybe you would want to lease option it out to someone who has some basic repair skills. This would help cut down the trips to the house every time a toilet overflows.
Need analysis on deal (long) - Posted by NellB(ID)
Posted by NellB(ID) on January 14, 2000 at 20:10:29:
Background:
From newspaper ad I placed some people I know called with a rental for sale about 50 miles from where I live. Because of their age, they want to sell a 2/1, fireplace, kit., LR, DR, utility, 3 large lots, carport, garage for $55k. (The county recently assessed this property at $65k.) New roof was put on about 3 years ago plus while it was empty last summer they did some additional improvements. These people just want to get out from under this property so they have retirement freedom. The owners want to be cashed out. I asked them about taking back a second, but they weren’t very responsive to that idea.
I also know the current renters. These people have tried three different times to buy this place, but can’t qualify for a mortgage because of a past bankruptcy. They currently pay $400 a month rent, but the owner said she was thinking about raising that.
I plan to drive by the place on Monday and maybe talk to the current renter if I find her at work.
This is a great location and I would not be opposed to keeping this as a long term investment if I can get the numbers to work and the property checks out which I suspect it will.
Any suggestions on how I might get into this place would be very much appreciated.
Re: Need analysis on deal (long) - Posted by NellB(ID)
Posted by NellB(ID) on January 15, 2000 at 08:31:45:
I didn’t make myself clear. I would like to sell it to the people that are currently renting the property. I was thinking maybe the sellers would pay all closing costs since they’re not having to pay realtors fees. I also was thinking I might keep it only for a couple of years and then sell the note or since I only have 5-6 years until retirement I was thinking this might be a good one to keep as an income stream. It’s in a good location–out of the snow and a nice, little bedroom community to a town of about 3,000 people.