Help with offer on 3-family - Posted by SteveM(MA)

Real Estate Investing
1

Posted by Carol on March 23, 1999 at 16:32:51:

I would assume that the “offer form” can have an addendum attached?
That’s my favorite piece of paper… you can spell out exactly what you mean, and put on the offer (and later, the contract) that an addendum is to be attached and made part of the contract.
02 cts worth.
Carol

2

Help with offer on 3-family - Posted by SteveM(MA)

Posted by SteveM(MA) on March 23, 1999 at 09:27:43:

I’ve ready to make an offer on a local 3-family needing some work. The property only has one inhabitable unit at the moment, the other two need work. Here are the specifics:

Asking - $99K (owned free and clear)
FMV(recent sales) - approx $110-120K
Market rents - $550-600/month
Work needed - $20K? (roof, two bathrooms, rebuild back porch(2-story), heating system (2 floors), electrical upgrade, paint/wallpaper)

I plan on making three offers:
1.) $49K all cash;
2.) $10K cash/$44K owner
3.) $59K all owner

My exit plan is to flip if I can find a buyer quickly, or rehab and hold otherwise. I figure that I can put someone in the liveable unit immediately to help carry then place while the other units are rehabbed.

It’s customary here in MA to use two REALTOR approved forms, one for the offer and another for the Purchase and sale. I don’t want to use this offer form since it doesn’t provide for owner financing, it only has spaces for earnest, down payment, and due at closing amounts.

Questions:

  1. Does anyone have a simple offer that they can send me similar to the one Scott Britton dictated to us at the convention? (Now I know why he made us pass them all up to the front)
  2. Comments on the deal?

Thanks,

Steve

(Steve C. - this is the one that we discussed at the restaurant a couple of weeks ago)

3

Re: Help with offer on 3-family - Posted by Jim(MA)

Posted by Jim(MA) on March 24, 1999 at 05:34:08:

Steve,

Carol makes a good point. The standard MA offer also should include Addenda A which are your Contingencies. If you reword the mortgage contingency clause to read owner financing that should suffice. Then the addenda will become part of the purchase and sales agreement as well. I have added my own contingencies in additonal addendums on almost every deal because those standard forms also do not address issue relative to condos or issues relative to the purchase of multi-unit properties.

Hope this helps

Jim