What would you do?

[abinvestments]

Been looking at a 2 BD/1BA/1 car.  Seller willing to finance.  Asking $65K w/$5K down.  She suggested I make her an offer and "remember we have terms" were her exact words.  She has not presented those terms, but keeps reminding me she is flexible and don't worry about embarrasing her with an offer.

Current comps:
$59,900  2/28/08 (decent, livable)
$122,500 3/25/08 (nice)
$51,000 2/21/08 (nice)

Rehab: $25,000 (high end)
Not sure of the condition of the properties at the time of purchase, but I belive they were in better condition than this property I am looking at.  Does that even matter in making an offer?

Rents: $800-$900 (I'm still confirming, but calculating based on lower)
2% rule says the most I can offer is $40K-$45K (purchase + repairs)  Which would mean I would only want to offer $20K max.  Am I looking at that right?  According to the records it looks like it was purchased for $20K.

Is this one I need to run away from?  If not, what offer/terms would you suggest I make.  Did I provide enough info?

[propertymanager]

I agree with you that the most you can pay for this property is about $20k.  I strongly doubt this will end up being a deal (since the seller is asking basically retail).

Mike

[Foreclosure Negotiator]

She's Asking more than what the majority of the comps support.  The highest is more than double than the other two so that means there is a reason why.  Is that reason reflected in the subject property?  If not, then high comp is obsolete and should not be used.

This means they are asking  more than what the comps support.  Why is that?  What about the subject property justifies the higher asking price?  Or are you using bad comp properties?

Plus you say it needs $25k in rehab.  At the current asking price that means you would be into the property for around $90k.

It doesn't look like that great of a deal at that price to me.


GooD LucK!   

[abinvestments]

She came back and said they need to be in the $50k's.  She claims she has appraisals for $58K.

Or are you using bad comp properties?

How do you get bad quotes?  Error on part of realtor?  I got them from my realtor.  Is it possible his numbers are wrong?  I don't know how they get the numbers, but I assume you can't mess up listing the sold price and date.  Am I wrong?

[propertymanager]

You're overthinking this situation.  It doesn't matter what her appraisal says or who did it.  You know that you can't pay more than about $20K for this, so what else really matters.  It doesn't matter what the appraisal says.  It doesn't matter what the owner owes or wants for the property.   THE ONLY THING THAT MATTERS IS THE PRICE YOU CAN PAY TO GENERATE THE PROFIT YOU NEED!

Good Luck,

Mike

[abinvestments]

Oh no propertymanager I am not looking at that property unless she can come to my number. I was just updating the thread. I gave her my number and that's it. I made the mistake before of not walking away from a property. 

I also was looking for answers to my questions as I'm trying to learn all I can.

Thanks all.

[Foreclosure Negotiator]

I'm in Cleveland, OH.  I bought a house for $13,000 and put $3,000 into it.  Then I rented it out for $950 per month.... 

You say 'Can't', I say 'CAN'!  Never say 'never' my friend.

GooD LucK!   

[propertymanager]

I bought a house for $13,000 and put $3,000 into it.  Then I rented it out for $950 per month....

Great deal Matt!!!  $16,000 for $950 rent - gotta like that!

Mike

[abinvestments]

First you ask what part of the country I am in and then you proceed to tell me what I can and can't get in my area. That is so stupid. A buddy of mine closed recently on a similar house and is getting $875. He lowered rent to get it rented quickly. So don't tell me it can't be done. AND his isn't as nice as it could be. By the way I'm in IL. 

Good job on your investment! Stories like that keep me motivated.

[propertymanager]

Dang dang44!  If the best you can get for a $75k house is $400 per month, you better try lottery tickets.  The only thing your doing with $400 rent on a $75K house is going broke!

Mike