Hello all. Newb question here. I have a lady who wants to sell a rental and she owes 39k on the mortgage with $5k in back taxes. The property is estimated at $117k. 4 bed 2 bath 1488 sq ft 2 unit rental. with one unit vacant ( she says its renovated and ready but admits the occupied unit may need work). The occupying tenant pays $750 which is about $100 lower than the average for that area. Do I factor the mortgage and taxes into the purchase price? Assuming im finding a cash buyer. after that is done will this be a good deal? thx in advance.
@Andre Lozada Offer to buy it subject to the mortgage for her payoff amount. Pay the back taxes and rent out the other unit and you'll be in great shape. You can keep the property yourself or sell it as a turnkey investment. If you don't have the money for the back taxes then wholesale the property as-is, you should be able to get $10-$15k more than her payoff, especially with the mortgage taken over sub2.
@DougPretoriusthanks for the reply. Would you mind giving me some numbers to better understand. It's get tricky with both the subject too and a rental property in the same deal. Easier if I were wholesaling to a fix and flip. But to a buy and hold its confusing. Assuming the 30-35% rule doesnt apply for a rental. So pv at $117. $5k in taxes, 8k-10k in repairs (just in case) my fee at 10k. I'm at 94k. She isn't behind on mortgage but is just tired of dealing with the property.