Opportunity to Purchase A Single Family Home From Family Member

[Brandon Johnson]

Came across the opportunity to purchase a single family home from a family member at a great price. Originally was offered the home for 70,000, which may be what it's worth. Was able to get the price down to 55,000. The home is located in Bedford, Ohio which is a suburb of Cleveland. The home has 3 bedrooms and 1 bathroom. Our plan, is to update the house and sell it, ideally for at least 90k. I'm not sure the comps support the 90k ARV.

How would you evaluate this offer?

[Greg Scott]

Brandon:

There are two key things I would evaluate on this deal.

• The first one is the financial returns. Unfortunately, there is not enough information here. We would need to know the rehab costs and whether or not $90K is a wish or the true ARV. Also, include closing and holding costs.
• Perhaps the more important evaluation is the emotional one.   If you make a killing on this property because you talked old Uncle Bob from $70K to $55K, your future Thanksgiving and Christmases might be ruined.  You could become the family outcast. You may want to assess that situation.  Personally, I wouldn't trade peace within the family for a few bucks.

Good luck.