BiggerPockets

this deal im working on is a single family and a 3 family on same lot...right now im at $285K and it needs $25K in work, bank will be getting back to me nxt wk...realtor already said im probably going to have to go to $300 but I started at $270K and im not sure i should go to $300K...but when i look at monthly cash flow it tells me to go to $300K if needed

rents are $1400 for each unit...$5600 total monthly rents...very large 3 bedroom (could be 4 beds) units in 3 family and 3 smaller beds in single family...

i estimate my cash flow at $2233 per month...why shouldnt i raise my offer if needed...i guess im just looking for feedback either way

I think you're overly optimistic about your cash flow, but this still looks like a deal.

Rent $5600
Expenses $2800 (50% rule)
NOI $2800
Payment $2062 ($310K, 7%, 30 years)
Cash Flow $738
Cash flow per unit $184

That doesn't consider what other units are selling for in the area, or local conditions. If there are a ton of similar units for rent, this price might be high. If vacant units get snapped up in a few days, and there are lots of new jobs coming, and this is priced well under other properties, maybe you could pay a little more.

broker called me today and said he had another offer at 290K and they wanted final and best...i went in at $300K, we'll see what happens, i really want this one, im ready for my nxt deal and this has the possibilities of condo conversion and/or subdivision down the road 10 yrs or so...

Don't let it "kill you" Stick to your guns. If your final and best price from YOUR analysis was $300k, stand by it.
Keep in mind that every single month, a deal of a lifetime comes across your path, so long as you have your eyes and ears open.

will,
from the start i said $300K is my limit...

i know the listing broker is not supposed to tell you what the other offers are but most of them will...and part of me doesnt believe him...he called me today and strangely told me that the bank wants both offers and that they might still accep my lower offer, something just doesnt smell right...keep you posted

There could be lots of reasons why the seller wants to look at both offers and why highest price is not the only deciding factor. Could be the seller needs to close sooner vs later or vise versa. Could be your offer looks better because your credit scores, cash on hand or bank is easier to deal with or some other issue.

Do you have an agent working for you? Sounds like you are dealing with the sellers agent. I never like to work without an agent of my own. They can usually sniff something out for me. Knowing why the seller is selling is usually the best info to have.

Stick to your bottom line and keep looking. You will find it.

Diane

I would disagree and keep the offer on the table. I would also have all correspondence with this agent in writing. When you ask for something in writing, people tend to be more truthful. You said the deal works at 300k. Do not second guess yourself. If you end up not getting the property, thank the agent for his time and let him know that you are still interested in buying property and if anything interesting comes across his desk, to give you a call. You never know, this deal could fall through and he could call you back in a few weeks. Good luck and let us know how things work out.

no news on this property, the realtor said he'd call me after xmas...i still want the property but wont go any higher than $300K...have i fallen in love w/ it?...i dont know...i do know at $300 it still makes damn good cash flow...

the property is still marked active and not UA yet...but i have a hunch its going to be foreclosed on

im also not worried about having an empty apartment, thats part of the game...in my market i can fill these 3 or 4 bedrooms in this neighborhood very fast even in the winter, they are way above average units...

if i can get it at $300K- great if not o well...im not planning on getting this one, bc there is another (supposedly) offer that is higher...there is a chance the realtor was pulling one on me, but from the start i said i'd go to $300K, therefore i started at $270K

BG,

It seems to me that you are getting played.

Your original offer should either be rejected or "countered", in writing. It sounds as if you are doing "verbals" with the listing agent. Get this deal in writing and refuse to respond verbally.

i know the listing broker is not supposed to tell you what the other offers are but most of them will...and part of me doesnt believe him...he called me today and strangely told me that the bank wants both offers and that they might still accep my lower offer, something just doesnt smell right...keep you posted

If they'll tell you a secret, then lord knows what they will tell the other side.

By the way, I don't know of any realtor that works harder to get a higher price so that they earn more commission. The difference in commission between 300 and 305 is insignificant. What makes all the difference in the world is how many "sides" do they get and/or their relationship with the seller.