Is this a good deal?

[sancho_man_orlando]

I put a property under contract the other day and I'm a little nervous about it.  This is my 1st property after having made some bad deals that I ended up losing as a result.

I started a landscaping business and I have been getting flack for parking my trailers on the side of my house.  I have always wanted to start a nursery and a better place to park my equipment & trailers so I am looking for a house with some land.

The house I live in now is a 2/1 1,100 sq ft (which has my 2 kids sharing a room and my office in the living room... don't even get me started on sharing a bathroom with 4 people)... I am paying $1275 rent to a family member which is barely covering the mortgage.  They bought at the peak of the market and the house right next door has been empty for 3 months... It is a 3/2 and they're trying to rent for $1,000 and it includes lawn serivce & pest control.

I found a 3/1 1700 sq ft house on 5 acres!  At the peak of the market it was a $300k property.  Zillow has it currently at 209k and tax appraisers at $161k.

There is a 1st of 73,000 and a couple of liens and judgements that bring it up to about $100k owed.  I offered to take over the 1st, assume the liens (which I would attempt to negotiate and pay off later) and the seller to hold back a $40k note. 

The 1st mortgage payment is $718 and I said I could afford to pay $1,000 (which actually has me paying $275 less every month!).  So I said every month I would write 2 checks.  1 to the mortgage company for $718 and a second check for $282 which would directly reduce the pricipal of the 40K note.  Which is basically a zero interest loan.  The seller agreed and gave me 5 year balloon.

So basically I offered $140K for a property that zillow has valued at 209k, I will be paying $275 less a month than I am now, will pick up an extra bathroom and 5 acres to park my truck, landscape trailer, dump trailer and start a landscape nursery.

Did I do ok? 

[Dave T]

Did you get the deed?

[sancho_man_orlando]

I put it under contract but yes I will be getting the deed after title, mortgage info and home inspection are complete. 

[tatertot]

Excellent. I think you got a great deal on something that suits you perfectly.

A house that you buy for your family to live in is very different from a house you buy as an investment. So don't let the cash flow guys pick your deal apart.

The propert does everything you need. It's both a home and a base for your business, and you got it for a great price. Good for you.