Thoughs on pursuing this property - landlord tired
How best to make this work: Subject 2B; conventional mortgage; owner finance, etc.?
A friend of mine works full-time and has 2 rental properties. He’s almost an absentee landlord; he’s tired of being a landlord and is possibly looking at selling his properties.
He’s offered to sell me one of his properties on what he owes (he’s motivated seller, and he wants out). I reside in Dallas, Texas and the property is in Houston, Texas (a 3 ½ hour drive).
It’s a two story 4 bedroom house built in 2005; neighborhood is o.k. He purchased the property 6 years ago at $150K. He’s offering to sell it to me for what he owes left on his mortgage, which is $120K. He stated that he doesn’t want to bring anything to the closing table.
I can get a conventional loan for it, but I’m a little reluctant to put 20% down. Also, although I’ll hire a property management company to manage the property, I’m a little reluctant since it’s a out of city property. I grew in Houston, so I do know the area. Also, I do trust my friend very much.
How can I make this work without going through conventional? Also, I know a lot of BP members have rental properties out of state and they make it work, but I do have reservations even though a professional management company will be hired. .
Can BP members provide thoughts or suggestions please? Finally, let’s assume if I had to go conventional financing at 5% 30 year term, the cash flow is around net $200 per month.
Thanks!