Okay..Looked at the properties..ready to offer - Posted by Lisa

Posted by Dave on March 03, 2001 at 20:10:36:


I see that I just about repeated myself…sorry.
Senior moment I guess…


Okay…Looked at the properties…ready to offer - Posted by Lisa

Posted by Lisa on February 28, 2001 at 13:55:25:

Just came back from looking at 2 units - both are in the same neighborhood - in fact just a house separates them.

The first one is a 2 family - each one is a 1 bedroom but very large and spacious - tons of closets and storage and very little if any work needs to be done on either one of them. Possibly some roof work and some support issues in the basement (the foundation is fine but they removed what looks like support beams in order to make the basement bigger - then tried to hold it up a different way). Owners are relocating to Mexico - husband’s already been transferred there. Asking $115k - rents are 650 and 600.

The second one is a 3 family built in 1800’s which needs quite a bit more work. 2 of the units aren’t in bad shape but one is a definite rehab. Luckily the other 2 could still be rented while you did the 3rd. There are 2-2 bdrms and 1-1 bdrm. This one is being offered at 129K (good luck trying to get that I’ll tell ya!) and the owners are retiring. Rents are fairly low and could easily be raised to current levels. Probably 600, 550 and 500.

I asked both realtors about what the seller was looking for - monetarily wise - cash - etc. - not sure I got the answers I was looking for but I was told to make an offer and see what happened. This is where I need to do some creative thinking…however not sure I can do it without really talking to the owners first.

So, my next step is to price these out with the costs involved and decide how to proceed from there.

Any suggestions on how I should go about the step after that - actually making an offer? Any type of creative option come to any one’s mind?

I appreciate all input on this - both of these houses have great potential as long-term investments and I’d like to really make a shot at one of them.



Re: Okay…Looked at the properties…ready to offer - Posted by Dave Mckee

Posted by Dave Mckee on February 28, 2001 at 14:36:11:

The 3 unit sounds like the most promising. It sounds as though the agent is not too creative or motivated, so you will have to get input by making an offer that makes them get more specific. I would offer the deal that you would like the best. If they take it, your happy. If not, they will show you what is important to them, and you can re-structure the offer.
In similar properties I have found that they may be hard to sell because of extensive work needed, and the seller does not have the money to do it. They are motivated most by cash offers, but who wants to do that? Nobody! Anyway, I offer them an AS-IS cash price that I feel GOOD about, all due at closing. THEY feel good about that! I use a six month option with the right to sub-let so I can rent out the units as I fix them up, and with the right to do any repairs I want to at MY expense. I generaly pay about 1% of what I am offering as a consideration for the option. That is the sellers to spend, but I get credit for it against the purchase price at closing. The repairs make their security stronger as the work progresses. They have no expense or management costs and I pay a monthly amount equal to their average rent as additional option consideration. That way it is credited toward the purchase price at closing. They are still in title, so they haven’t had any commision or selling costs to pay, and they credit the purchase price for any refundable deposits they collected. They are also paying the taxes untill closing date and any mortgage payments. I would have a contractor bid on the work to be done and also have the seller furnish a T&D report, so you know what you’r getting into and the cost, even if you do the work yourself. When you have most of the work done, make aplication for a new loan to purchase.

Good luck!


Re: Okay…Looked at the properties…ready to offer - Posted by Lisa

Posted by Lisa on March 03, 2001 at 16:39:19:

Wow Dave what an answer that was! I’m still reading it over to make sure I understand the whole idea you’re suggesting. You make it sound so simple.

On a secondary note to this situation - the realtor from the 2 unit called me to see if I was interested but I have the feeling she’s withholding information about the sellers needs and what they are looking to get from this property. I’d like to call the sellers directly and speak to them, otherwise I can’t get a good handle on where they actually stand. Any thoughts on this? Is going around the realtor a good idea?



Re: Okay…Looked at the properties…ready to offer - Posted by Dave

Posted by Dave on March 03, 2001 at 20:03:58:


If the realtor introduced you to the property, it would be unethical for you to “go around” her. Unless you asked if she would mind if you talked with the seller. If the realtor consents, then it’s OK. It’s a good idea to “cultivate” Realtors, even if you don’t need them.
Another way to get where you want to go, is to write an offer that you REALY wish they would take, based on the best scenaro for you. If they accept it, your happy. If not,explane that you had to do the best you could with the info you were given, then ask for a chance to meet them so you can “do better” next time.

Good luck!