I am relatively new to really estate investing. I just bought my first property in NJ - a 3bd 2bath condo so I am able to move out of my parents house and be on my own. However, my parents live in a duplex where previously we all have lived in for the past 13 years. My parents do not own it so they have always paid rent and we have a close relationship with the owners since we have been great tenants for the past 13 years.
The owners of the duplex are now old and I have been noticing a lot of things that have been broken around the house for a long time. The owners just simply don’t have the time anymore to take care of the property and I have noticed it. So me wanting to get a chance at a second property called the owner and asked if she would be interested in selling and she said she was.
Unfortunately I can not qualify for another mortgage since I just took one out on the property I just bought last month and this duplex would be outside what I would qualify for anyways. So I did some research and explained to her about owner financing which she said she might be interested. She said she has to talk to her accountant and son in law before making a decision and will reach out to me shortly.
She says she wants no less than $400k for the property however due to all of the repairs and everything that is required I am not sure it is worth that much. My question is what if she decides to move forward and sell it to me, what next steps should I take? How do I find out what the property is really worth and make it a fair deal?
And if she still wants to sell it to me and decides not to do owner financing how else can I find money to fund the deal?
Like I mentioned before I am still brand new to real wastage investing and there is still so much I don’t know, any help would be appreciated
You'll find out the value by getting an independent appraiser to appraise the property. They will make adjustments based on condition. For a duplex you're probably looking around $500-600 or so depending on the area.
If she doesn't want to do the owner financing then you're going to be stuck looking at the private/hard money market referred to in the mortgage industry and Non-QM (non-qualified mortgages). Many investors will lend on deals like this where a history of rent can be established, you don't have to meet all the agency requirements that you did for your other loan. The rates and fees are going to be quite a bit higher. Talking to a local mortgage broker can get you started in the right direction usually.