Hi there. Me and my wife are new investors in our area. I was wondering if I could get some professional opinions on this duplex
$1000 per month each side which is slightly below average so I would be raising it to $1050
TERMS: PRICE - $319,999
DOWN - HOW MUCH CAN YOU?
RATE - DEPENDS ON DOWN
BALLOON/BALANCE DUE - 1/1/2024
I would like to get some guidance on this. I know it doesn't meet the 1% rule and would like some suggestions on how to make this a deal for both of us. the owner purchased the property 4 months ago for $265K
Hard pass. The numbers show you everything you need to know. The seller is literally trying to wholesale a property to you at this point.
thank you, even at the price he paid back in January it looks like he is barely breaking even.
@Michael Anderson The owner is looking for a quick flip to an inexperienced buyer. Unless you're desperate and need to support a family don't be that person.
@Michael Anderson - This depends completely on down payment and terms. If seller is willing to do owner financing at a very low rate the deal may work; at 10% down the payment would be around $1385 per month P&I if they do 4% interest amortized over 30 years. That MAY work depending on other costs like management, taxes, insurance, etc...
If on the other hand they're looking at ~30% down and 10% interest it would be a very hard pass (90k down would be $2018.41 monthly at 10% amortized over 30 years).
The other problem is a 3 year balloon payment. That would also be a hard pass and is usually a tell-tale that you're dealing with a not so motivated seller. Never get involved with a balloon payment unless you are certain you have a exit/refinance strategy.
Chances are, this is likely not a good deal at all. However, with the right terms, it could be. With the wrong terms, it's an utter disaster waiting to happen (property with negative cash flow = disaster to me).
The deal is a loser with those numbers. What has the current owner done in 4 months to justify the $55K price increase?
Yeah, he was not willing to be flexible. Sounded like he is trying to get out of a bad deal by giving someone else a worse deal. Not the kind of person I want to do business with.
@Michael Anderson sounds like a great deal... for the seller