I am a newbie BP member and am looking to learn more about real estate investing. Currently, I live in Washington DC. As a renter, I've always had pretty good luck finding low rental prices. Next week, I am moving into a bedroom in a 5 bedroom townhouse and the rent is only $470/month. This rent is LOW for DC, especially when you account for the prime location of the apartment (it's in Columbia Heights, only 2 miles north of The National Mall and 1 mile north of major attractions like 14th St Heights, U Street, Adams Morgan). I also talked to the housemates and they say that the landlord hasn't raised the rent of the house more than $100 for the past 2-3 years.
The house also isn't in the greatest of shape, and it seems like the landlord tries to interact with the house as little as possible. It sounds like a landlord that doesn't have too much invested into managing this property well. I am thinking that I would like to approach the landlord to see if they would be interested in selling the property to me.
Question is, how do I do this? I am just moving in so I don't have an extensive relationship with the landlord yet. Should I wait until I live in the house for a couple months? I don't want to swoop in or offend the owner.
It would be great to see if anyone on BP has any language that they use for this type of situation! Any tips, guidelines, or advice would be greatly appreciated!
What I would do is just start a genuine conversation with him, say that you're interested in real estate investing, ask him a couple of questions, maybe ask how long he has been in the game? does he have other properties? etc. etc. and just see where the conversation goes.
Don't overthink it. Simply tell him what you told us.. Well minus describing his property to him. All you can do is let him know you have interest in purchasing his property and see if he has interest selling. Let him know what you can do for him. If you are going to be paying cash then let him know that.. If you want to see if he will finance it for you then ask him.
That is super cheap and a awesome spot. I would definitely do the same if I were you, great idea! I agree with Max, live in it for a little while. Get a little better feel for the place, the landlord, etc. At that point, if you're still interested. Just approach him telling him you think you'd like to purchase the property from him
Since you say the house doesn't seem to be in the best shape. I'd live there for some months and really assess what is "cosmetic" and what, if any, more serious problems the house may have. This will help you to figure out what you would want to offer for the house eventually and enable you to do research on repair costs.
Then, when you do start a conversation with the landlord, and if he does seem interested in selling, you can come up with a price that is based on your knowledge. For example, "I'd like to offer you $XXXX as I'll have to replace the roof and also the heating system that we had you send a repair person out for 5 times for this last winter. I understand that you don't want to invest all that money in repairs when you're interested in selling and I'd love to take that off your hands..."
Oh, and, if you do buy the place. You're going to be the super-evil landlord that raises everyone's rents by 100%. As a tenant its great to spend little but as a landlord, you want to maximize receiving market related rents.
Absolutely talk to the other renters before you talk to the owner. You want to be sure you know what is going on with the house.
I like a more open-ended approach. "Hey, I like living in this house. If you are ever interested in selling it, I would like to talk to you before you talk to a real estate agent. Maybe we can come to an agreement." You aren't offending right off the bat by offering giving him a lower offer and telling him all the things that are wrong with the house. You aren't pressuring him in any way, it is more like making conversation. Offer a specific dollar amount or even a range, and they see the money and assume that is set in stone. Who knows what condition it will be in when he decides to sell?
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