Would like to know what would be the correct way to analyaze this property.

Question

Hi a few questions from this new guy, just going to bullet them.

INFO

My mother and sister would be renting the house out so no worries on finding tenants.

The property I am looking at is going for $170K and is asking a 3% down.

The house is a contract for deed.

1. Does this mean I am purchasing the house from the middle man?

2. Is it legal for me to rent this property?

3. Is it a sound investment? I am just starting out, and would like to do it right.

Any thing you guys can give me would be appreciated.

Oscar Romero · Answer

WOW! Awesome info thank you!

Lisa Kohl · Answer

Hi Oscar- you'll want to do your due dilligence in regards to price and condition of the property. Contract for deed usually means the seller is providing you with the "loan" and you will make payments to them with a balloon payment at the end of the term. They keep the title in their name during this time.This could be a good investment if the numbers work and you have an exit strategy as you will at some point need to find a way to finance the property. Here's an article that gives an idea of how contracts for deed work in your area. It's a bit dated but has some good info.

https://www.minneapolisfed.org/publications/community-dividend/risks-and-realities-of-the-contract-for-deed

Would like to know what would be the correct way to analyaze this property.

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