Is this a Good Deal?

Question

So about a week ago, I think a wholesaler email me a list. One of the property is right next to my other property (a block or two away.) I'm looking at the zillow history, and the seller bought them at 60K, and trying to resale it at 88k with term. Bascially term is From the email. "14k down/ $800/mo; probably needs around $5k in work and you could turn it around and sell retail at $130K or so. You would have to hold on to the property for at least 3 mo before selling it. (that is a condition on the loan)"

I look at the picture, and remember driving by that same house a bout a year ago. I email back to see if I can have my property manager sent out a inspector to check it out and see what need to fix.

The thing I'm only thing I'm wondering is why is the mortgage fee so high? Even with 20% down, and conventional it's about 500. Could the interest rate be around 10%? If I do purchase this, should I refinance it right away?

Brett Russell · Answer

@Shuai Zeng , I guess it depends on how long the term is for those $800 payments.

Also, if you say you can't resell the property for 3 months, then you probably won't be able to refinance for that amount of time either.  But if you want to refinance right away, then just get a normal bank loan from the start.  The seller is probably willing to accept less if he gets all his money right away.

David Sicherman · Answer

the phrase "probably needs $5k worth of work" is a red flag.  That translates to me as "definitely needs $10k and probably more.