Is this a deal?

Question

Guys I am pretty new to real estate and trying to get my first deal. I have a couple who has a duplex or 1 unit in a duplex that they want to sell. It already has a renter who has been renting with them for two years. The numbers look something like this:

Retail Estimate - 98-100K acording to zillow and city-data.
They owe - 85K
I contract it for - 85K 
Then flip for - 92K or around that number.

It needs NO repairs, is in a nice neighborhood and already has a good renter for 865 per month.

My question is based on that information do you think it is a "good" deal from an investor or landlord standpoint? 
Also, would closing eat up the profit or is it typical for the end buyer to cover the closing?

Thanks for the advice. I love this forum!

Jon Holdman · Answer

Even if you don't list with a realtor, you'll probably have to pay a buyer's agent their side of the commission.  So, 3% instead of 6%.

Jon Holdman · Answer

If you sell with a realtor for $92K, you'll net about $84K after all the costs.  When you buy, you'll pay about $1500 in closing costs.  Sounds like a good way to lose $2500, if that's your plan.

It would be of no interest to a investor.  You need to be under 65-70% of retail.

Zillow is useless for determining value.

$895 in rent for $85K purchase price will lose money.  You need to be down below $67K to be break even.

Will Barnard · Answer

You need a much bigger spread than that. You may want to consider exploring a short sale on it. As Jon stated, Zillow and other sites are not great resources to base value. The only proper way is to pull actual comps (sold comps within 1/2 mile and within last 90 days)

You should be able to find better deals than this in TX. I am!

Greg Garcia · Answer

Thanks John for the insight. I would not be going through a realtor, but I guess I hoped that since it had a solid renter and needed no repairs that perhaps it may still be interesting to a landlord.

Thanks!