How Would you Approach This Deal?

[Jon Carcone]

Hey Guys,

I was hoping you could give me some guidance on how to approach a potential deal.

The seller is asking 430,000 for a SFH and the gross rent is 3500/mo-- utilities and non-cap expenses (up to about $200) are paid by the tenants which, in this case, are college students.

He owes about 60k still on this as he has owned this for a number of years. He is willing to carry some of the financing.

If you'd go after a proeprty like this at all, how would you structure a deal in terms of offer price and the right a combination of owner and bank financing to make this work?

thanks for any insight,
jon

[Will Barnard]

If you are attempting to buy this property for a long term cash flow position, you ceratinly can not pay that much unless you want to lose money. If you have some spec play or flip in mind, you would need to provide more details for us to comment on it.

As a rental, you are well below 1% rent to purchase price ratio which is very poor for a rental.