Need some advice FAST
Hey guys, this is only my second post here, but any help would be greatly appreciated. I will try to keep this as short as possible.
I have an offer in on a duplex in a good school district. It was listed at 125K. One of the units is gutted and i have had GC's, electricians, plumbers, and HVAC guys out for estimates. All together looks like renovations are going to be about 45k, but i tacked on 25% for unexpected costs- so 56K for renovations.
I put an offer in for 110k with a 6% sellers assist. I was told today that I've been outbid and someone else offered the full 125K with a 6% assist. My realtor says I should just try to match that offer and since my realtor is also the listing agent they say they will have more leverage to have the seller accept my offer (hmmm wonder why...).
Anyway, the end of the line value of the home is around 175K. This will be my first home purchase and I will live in one unit and rent the other. The 3 br rental should generate 1200-1300 per month based on other rentals in the area.
I'm stuck wondering if I should try to match the 125K offer or walk away. It seems silly to me to buy a place, go through the headache of remodeling, just to spend more then the place is actually worth. I want a DEAL! ....
BUT assuming renovations went fast and I got a tenant quickly, I would still be lowering my monthly expenses WHILE building equity in a property.
WHAT WOULD YOU DO?
Things to note:
I am already spending 800 per month in rent at my apartment
I have the cash flow to foot the mortgage if it goes unrented for a period of time
I am doing an FHA 203k loan with only 3.5% down