Neighbor's offer to buy my rental

5 Replies

I own a rental property in Chicago that currently has a lease and the monthly rent covers the mortgage and HOA assessments exactly. The unit is not listed for sale and I owe more on the property than the market value. A neighbor recently sent me an offer to buy my unit that is about 10-12K over the market value. I am thinking about selling it by owner to reduce expenses. Property values are rising, slowly in the area but I'm considering the offer in order to reduce debt and maybe purchase elsewhere. Thoughts?

The best analyze this we need to know how much you would net at closing.

Once you know that, determine how long it would take you to cash flow/profit that amount. Based on what you’ve described it’s not a good investment property bc every time something breaks or you have a vacancy you are out of pocket.

Determine how much you would net and whether that can get you into a better investment, whether it be real estate or not. That the purely logical analysis.

I’m no expert, but if you owe more than it’s current market value, then I’m inferring that this property has depreciated in value since you bought it. Also, the repairs and vacancy that inevitably come with operating rentals mean a negative cash flow.

Negative cash flow + low chance of appreciation = yikes. Without knowing anything else, I’d strongly consider selling if you have a offer that’s higher than market value.

Well from what you said ..You don’t have an asset you have a liability . If they give you 15 grand over it’s value id dump it while the gettin’ is good . If it’s upside down now at the top of the market how much worse will it be in a couple years during a correction .