Newbie needing advice on a great deal
I have a motivated seller that is wanting to get rid of her single family property ASAP! This 5 bed 3 and 1/2 bath home was built in 2008 in Glenn Heights, TX and has little to no repairs needed. I have $20,000, the house is worth 300,000. She is willing to go as low as $250,000 but being a motivated seller, I’m confident I can negotiate a price lower than that. I need help and advise on how to handle this deal.
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This is not necessarily a great deal unless you are planning to live in it. You haven't given enough of the financials to determine if as a rental it makes sense, run it through the BP rental calculator to see. If you are going to use hard money to purchase it you would pay 3% in origination fees and would be able to finance about $225,000. The origination fee would be $6,750. You would also need to cover all of the closing costs so say that your expenses to purchase including the origination fee would be about 10k that means you need to get the house for $235,000 for your $20,000 to cover your costs and the down payment and be at the common 75% loan to value. If you turned around and sold it for $300,000 you should calculate 8% in selling fees, so your maximum profit would be $31,000 which does not include the carrying costs which would include utilities and the interest payments which would be around $1,875 a month, usually with a 4 month minimum.
If you are going to occupy the property or house hack, the numbers are completely different and make a lot more sense.