Questionable numbers on grandfather’s home

[Tyler Vicari]

What’s up BP

I could really use some help with my first potential REI

My grandfather is prepping to sell his house that he claims has a market value of about 75k (according to his realities) but is willing to sell it to me for around 55k. He wants me to buy it by the end of July Bc of things that he has lined up for himself.

The neighborhood that it is located is not the greatest but is also not horrible. According to some loose comps that I pulled, I am questioning if the marked value is actually 75k. It has 3 bed, 2.5 bath, spacious living room dining room and kitchen, laundry room, large unfinished basement, front porch, back porch and yard. It is going to need some pretty major work done however.

After running the numbers, even if I could talk him down to 30k (which I feel would be more reasonable) the numbers still do not look too great. I estimated 25k in repairs as well. I would CF 145, cash on cash ROI is 6.96, and the 2% rule only hit 1.27.

It would be nice to help him make a sale and purchase my first property but even after a major talk down, the numbers still do not seem ideal.

I would greatly appreciate insight from some folks with more knowledge and experience than myself.