Need help to find a way to make this deal work

[Aniq Bajwa]

I don't think there's a way to make this work but I'm curious to see. My goal is to bring very little to nothing into the deal. 

Listing Price: $330k ( I think they're motivated and I could get it significantly lower)

Potential Rent: $3000

Turnkey, well maintained, no issues

I know the owners are motivated to sell (divorce). The owners are not interested in creative financing. The only thing I could possibly think of is a DSCR for an amount to get the ratio to 1.0 or below and then maybe a small owner finance amount for the amount above that. Not sure they would go for that either b/c they're going through a separation and may not want that complication.

[Jeremy Horton]

Quote from @Aniq Bajwa:

It’s the house I grew up in and there is sentimental value. 

I’ve done a few BRRR’s and I’m familiar with that formula. My concern is they’re not THAT motivated. The listing started at $350 and has slowly come down over 7 months to $330 now. I could make an aggressive 75% offer but I don’t think they go for it. 

Regarding cashflow I think you’re right with expenses it’s probably cash flow break even but I’m ok with that. I would just like to own it without putting much I to it to get it and then for ongoing basis it pays for itself.


Quote from @Jeremy Horton:

Why do you want to make this deal work? 

I saw 2 numbers and I can already tell you it won't cashflow as a rental 

Assuming the listing price is indicative of the actual value of the house...I'd offer them 330k * .75 = 247.5k, assuming it's 100% ready to go. From here simply subtract the repairs needed - ie: 10k of repairs needed, I'd offer 237.5k. Start there and see what they say 

Do the sellers know this? Have you gotten in touch with them? Talk with them and find out what they want - a fast sale? Highest price? Then formulate a solution to solve their problem. 

Why would you do a DSCR over a conventional loan? Probably get better rates/terms with a conventional loan. There's a high probability that rates go down in the next few years, so you could refi into a DSCR then, if you needed to.

Regardless - it's hard for a sentimental purchase to couple as an investment, if you want the numbers to work. Give them a lower offer, see what they say and go from there. Do it ASAP and keep us updated 

Do you have a 401k you could take a loan from?