I have been keeping my eyes open for a cash flowing fourplex in my area and price range for a few months and recently a few properties of interest popped up. I am using a VA loan/lender and met with a realtor of their recommendation. I really liked the realtor after meeting with him and checking out the area, and put in an offer through him on the property I was most interested in.
I really like doing my due diligence on things like this so I have a number of questions. The property is in need of a new roof which would be mandatory prior to the sale due to VA regs. My agent suggested splitting the cost of the roof with the seller, and putting in an offer $6,000 more than the asking price to pay for half of the roof.
My primary question is is this normal for a first offer on a property that has been on the market for a few weeks and hadn't had any other offers, according to the LA? The property is not being marketed as a fixer or anything so if there is a major structural issue why would I come in at the full retail asking price? Wouldn't other prospective buyers who know that a new roof is needed just decrease their offer accordingly? I am just trying to get a feel for the flow of negotiation and make sure that my agent is acting in my best interest.
Thanks in advance for your responses. This is my first post on this site but I am already addicted!
It's your choice; offer a price that includes the Seller replacing the roof, or lowering your price accordingly and You pay for the roof after you buy. Of course, the second option probably isn't possible with VA financing. We can't tell you if the list price is good or not, and the strength of that particular market.
Here's what I would do: I would use the Rental Property Calculator here on BP http://www.biggerpockets.com/buy-and-hold-calculat... and run your numbers to see what a good offer would be. It's obviously not a hot property if there haven't really been any other offers on it so take the time to make sure your numbers are right (but not TOO long). Also, post your numbers in the Deal Analysis forum and let some of the seasoned pros here look them over for a second opinion. Then go in armed with that report and you tell your agent what you're willing to offer.
I could be way off on my approach as I've not been in the business long, but that's how I'd do it. Good luck on your deal! Hope you get a good one. :)
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