My mother in law currently has a tenant she is attempting to evict from her home... I would like to purchase this property. I feel like I could get a great deal on it. ARV ~$170k. Current state I'm guessing $120-130k. This is just North of the Orlando FL area in a city called Altamonte springs. I feel I could get it for about $100k and use some of the equity to fix it up a bit and use the rest of the cash to purchase an investment property.
Good or bad idea.? Biggest concern is this tenant. I'm trying to figure if I should wait and see if she will be able to kick them out or purchase it and do it myself?
Keep the sale simple. When it comes to valuation suggest you hire an appraiser. Let her decide on price. They subtract the condition.
In the mean time, talk to a mortgage lender about your qualifications.
First question. Is this your first rental?
Second question. Will you be remote if making this step?
If this is your first then find your comfort zone if managing remotely. Establish a support team locally first. Find an agent who can answer your questions, a property manager, and see how the property would work for you.
Living in Orlando I see Altamonte as a great area to invest in, large growth with much more to come and fairly family oriented. Do your due diligence however, there are several great meet up hubs in the area which would be extremely open to answer your questions. Rent in the area I believe will be increasing more and more as it continues to develope.
Based on your numbers, I think you are saying that it is worth $170k but needs $40-50k in rehab/repairs. If that is the case, and this is just my opinion, the property would only be worth $80-90K to an investor. (ARV x 70% - repairs = current value). @Wayde C Hall also makes some good points about having the right team in place.
Let me know if I can help.
Run all the numbers and see what price will work for your plan. Jump on the BP calculators and run all the numbers. Are you planning on keeping it as a rental? Do you want to do a flip?
Depending the location in Altamonte Springs, it could be a good rental. Have you seen the property inside?
Why is she trying to evict this tenant? Does she have a reason? if not, cash for key may work for both.
Run the numbers, add $800 for a lawyer to do an eviction or Cash for Keys if you need.