What is your opinion on wholesaling a property that is above the median home price not fitting the 1%-2% model with rent?
Through marketing, I found a property in Denver Metro (Centennial, CO) that would retail at $470k based on comps with a seller suggesting $400k purchase before negotiations. I can probably get him down to $380(ish), but it has tenants on a lease until 4/2015. The deal is there with room, but it comes with the tenants which don't meet the 1% rule with their rent being $2,500 a month. He said buy it now, get $25k over next 10 months, then sell it.
I can get this under contract, but not sure the end-buyer pool for a property like this. Regardless, it is a deal but not a great scenario.
Doesn't sound like a great deal to me. As a rental, the property loses money every month, and then if you want to flip it on the back-end, the best case is that there will be no repairs necessarily and the investor will net about $40K on a $470K resale after 10 months. Given that a $470K property will likely need at least cosmetic repairs before resale, it's probably a break-even deal for an investor.
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