how much should I offer on this property?
Asking price is 174,000. It's a 1br/1ba (980sq ft) and 4br/2ba duplex (1400sq ft). One side is currently being rented for 1100. It's located in a type B neighborhood. And it's also a foreclosure. It has about 18,000sq ft of land. Assessment value according to city is 218,000.
This would be our first property if we were to get it. If my loan officer was right on the dot with his estimations, we'll be living in this property for free then we'll have more money to save up for our next property.
Right now, I'm thinking of just biting the bullet and meet them right where they want it. Offer 170,000 then ask them to pay ALL closing. That sounds a bit fair to me considering that it's a foreclosure and it's selling with a special warranty deed.
I wouldn't pay a whole lot of attention to the City Assessment. Are you buying from the bank or short sale from the owner/seller? I'm not 100% sure what you mean by type B neighborhood, but I'd assume you mean not the best house and not the worst? How long has the property been listed. The more days on market, the lower I'd offer.
It is impossible to really tell you how much it is worth it, just based on the property information by itself.
City assessment can be wildly wrong, be aware.
One way to assess the value is to find the comps. I would try to find like a flipped house that has the same style and similar square footage, and the same bedroom/bath count.
Redfin has also a valuation tool that might help you.
Just having the rent pay for the principal/interest/tax isnt just enough to make money, but it is a good start.
Are you financing with a conventional loan? Does it need work?
@Daniel DiGiacomo yeah, you're right about class B except it's referring to the people in the neighborhood. It's pretty much a mix of white and blue collars. And I am buying from the bank. This property has only been in the market since the beginning of April so it hasn't really been out there for long, but where this is located, the place is flooded with investors due to the area being very saturated. So good deals like these come and go within 3-4 months typically.
@Rafael the comps we have are really off, the closes one we found is the last one in the list that sold on February for 169,000 with listing price being 172,000. And it was an up/down. This one is a side by side. It had 9800sq ft of land in total, one unit was 1br/1ba (600sq ft) and the other unit was 3br/1ba (1200 sq ft).
Also to answer your questions. I'll be using my VA to help finance and the previous owner was in the process of fixing it up when the bank foreclosed on it. It's in a ready-to-move in condition.