Depends on you - Posted by Bud Branstetter
Posted by Bud Branstetter on October 30, 1998 at 10:26:30:
As an investor I would look at it over a little longer term. A $191/mo payment on the terms you describe will be gone in five short years. If you fix up the house a little and rent out at a net of $200/mo your present worth at 10% is over 22k. While I want more than 10% return and do not want rental property I think that an owner finance property in better shape will bring you more money.
I’m going to look at a property tomorrow that the rehabbers are offering 70% of existing value because it need some paint, carpet and fixup. If I am right I can have them sell owner financed to a retail handyman. I can then sell the note and get more money for the people than the all cash rehabbers. I won’t have to lift a hammer or put money out for a painter. The time frame should be shorter than looking for a retail buyer to cash out at top of market price. No I won’t make 10K for the hassles of fixing up. But I do expect to make a few thousand for a few hours work.
What you have to do is determine what is the cost to get in prime shape and sell for top dollar. Then compare that to the cost of getting into decent shape and getting retail FMV. If you don’t have the money to fix up there are always the Title I loans.
BTW houses depreciate straight line over 27 1/2 years.