Sanity check - would you make this offer?

2 Replies

Looking to get additional eyes and thoughts on a potential purchase.

Here's the breakdown:

Home value: $250,000

Amount owed by owner: ~$150,000

My potential offer: $175,000 + $350 a month for 240 months (or $84,000, whichever comes first)

Rent: $1,500/month

Repair: <$5,000 (if any at all)

The owner is retired and full-time RVing.  They are currently renting the house for $1,100/month.  They are looking to sell the house, purchase a newer RV and invest whatever's left in a way that pays them monthly dividends.

I think this hits all their targets but I'm open to other ideas or approaches.

Thanks a ton.

@Micah Starbuck The offer sounds fine (even though 20 yrs seems kinda long for that amount of money - assuming that the owner doesn't mind little return). Is $125k (175k-150k payoff +100k equity) needed for the RV? One thing you can do is to offer 2-3 different offers so the owner can choose the one that fits the needs. E.g. lower down payment + higher monthly payments or shorter term in payments etc. Don't give just one choice which can be yes or no. Offer a couple options so they can choose one and feel good about it. Good luck!

Thanks for the reply, @Alex Kim .  Having multiple offer types is a good idea.  I spoke with another investor that's helped me in the past and he had mentioned doing a wrap around loan.  I'll look into that a bit deeper and see if that opens up any other options.

The idea for the 20 year payback was to meet their third requirement of having an investment that would last through their retirement.  It's not a whole lot but would likely be better than what they're going to find investing on their own.  I don't know what they're looking at in terms of motorhome cost but I figured the $25,000 up front would at least cover their down payment.