I bought a SFH, 3 bed 1 bath property last March for $64k with 20% down. In addition, I put about $3k into fixing it up. The profit after expenses each month (it's a rental) is $450, and that does not include deductions for maintenance or vacancy.
I had someone offer to pay $90k cash for it. It would probably appraise for 69/70, I only bought it a year ago. My profits from this sale would be about:
Offer: $90k
Loan balance: $51k
Total investment: $16k
So...
90-51-16 = $23k
The $39k I'd get from the sale (90-51) would take over 6.5 years to earn using just the profits from rent, and that's not taking into consideration maintenance and vacancy.
I think after only one year of ownership, this sounds almost too good to be true. Is there any reason I shouldn't take this deal?
Sidenote: I've asked myself the question: "If this is being offered now, imagine what could be offered in 1 or 2 more years!". But the difference I see here, is that I'm being offered way over the appraisal price, which doesn't usually happen right?