My neighbor is going into a nursing home and the realtor is listing for $145k. The home is 3b 1 ba 1300sqft. He repaired all the bones furnace , chimney , plumbing , roof etc but it is tired and could use a kitchen and mega landscaping . Also entry doors are not very flattering . The other comparables have sold for $145k to $170k.

I'd hunt much harder and buy 10 rentals with that money, for the price of that one.

The ONLY positive is if you buy it you will have control of the house next door to you. AND that has some value to it.

HOWEVER, from the business factor its not a great deal as NE of PA mentioned.

So its your money and what is your end results/goal.

Now emotions are maybe getting into the mix of things and it may not be the best business decision for you at this point.

LOW BALL and let the cards fall where they may and don't be influenced by the realtors chatter.

Just because it's listed at $145k doesn't mean that's what it will go for. If you've already seen it then put in an offer - if you haven't then go see it and put in an offer.

If you saw it BEFORE it was listed then go see it again. BE VERY THOROUGH with it. Bring a contractor if you want to make sure everything is good.

Offer low and cash with no contingencies and see if you can't get it to close quick. Not sure where you are in NY but where I am you are "lucky" (especially this time of year) to close quick since it's Holiday season and everyone is on vaca and/or trying to close prior to the end of the year.

I see another flaw: It's next door to you.

$140K tied up for a $1100/rent? That fails even the very low-return 1% rule.

SFH do not get evaluated by CAP Rate. Comparable sales are what you want.

Buying a $145K house that will sell for $145K is retail "investing"; that is to say, you get to wait 20-30 years to make your money.

Kitchen and mega-landscaping in a $145K house. My guess is $15K-$20K to bring it up to speed. And then it "might" sell for $175K. Profit margin is too thin ($10K-$15K). Too little for the risk and capital outlay is not worth it.

Each time I tried to buy a home from a distressed seller acquaintance, it never worked out too well. Since I'm a contractor I can get the repairs done at a deep discount. My crew or my labor with parts.

Most of the time when we strike a deal, the sellers ask a realtor or lawyer for advice. It never goes well. Realtors say, "I can get you a better selling price". Never mind the 6% commission and the repairs listed in the "Inspection Report".

One time I asked for a 15% reduction. Six percent because there was no commission and 9% for all of the repairs. They laughed in my face. I wanted around a $25,000 discount.

They got a buyer who offered them more money but when you deduct the brokers commission, is was the same as mine. When the inspection report came back, the final net cash to seller was around $18,000 less than my cash offer.

To this day they thought I was trying to cheat them. Since I'm a contractor, I should have done the work for free!

When buying an investment property, you need to make a profit at the purchase. Good deal at the time. Not to over pay. You can always find another house in a good area in better condition for around the same price.....If this was a real deal, you won't need to ask our advice, you would have already bought it...

of the 80 SFH's I purchased-- only one was not owned by the US gov't.

We tried the FSBO route-- WAY WAY to much time and always last minute PROBLEMS. Working on a deal for 3 or 4 weeks or even 2 months and all of a sudden the seller changes his or her mind. Who has time for that?

Sorry- fat fingers. No Problem gov't sales.