Bloomfield Hills, MI · Member since 2016 · 48 posts · 12 votes
Helloooo Bigger Pockets! I hope I am posting my question in the right place. Have done some reading and haven't quite found the answer. I am not sure there is one answer but rather perspectives on this question.
I have found two properties in two different cities we are looking at investing in: Detroit and Jacksonville. The Detroit property costs $55,000 and the Jacksonville $100,000. Both have very similar monthly cashflows.
On the surface it would be obvious that I am spending twice as much for the Jacksonville property to get the same monthly cashflow. So my question is, what other factors would investors want to be strong in order to purchase the more expensive property?
Real Estate Investor · Miami, FL · Member since 2013 · 474 posts · 214 votes
9y
What are your "valuation documents?" This is not the appraisal is it?
Anyway if you are buying with a mortgage I would certainly adjust my offer to account for the lower appraisal. And yes, you can offer 88k on a 104k list. The seller may not accept but it's not out of the ordinary and shouldnt be insulting.
Bloomfield Hills, MI · Member since 2016 · 48 posts · 12 votes
9y
Estimated Value v. Listed price question? We really appreciate all of your help and advice as we dive deep into the world of real estate. We know everyone starts somewhere, but it's definitely something that we're excited about and busy learning every day. The Jacksonville property we are looking at has cash flow that meets our numbers, however the list price is 16K more than the estimated value on valuation documents. That's a big gap. Does these valuations take into consideration upgrade, renos or simply data based on comps in the area? Surely we couldn't offer 88K, what the estimate is saying if the list price is 104K, If the estimate was close to the list price we would be keen to offer 99K.
On the other side of putting in an offer and when it's accepted. If you then have a appraisal done, is it standard to have an appraisal contingency in the purchase contract and if the appraisal is far less than can you walk away unless the seller is willing to come down? Even if you put in an offer that was much more?
Thank you advance for any further insight into this!
Real Estate Investor · Miami, FL · Member since 2013 · 474 posts · 214 votes
9y
What are your "valuation documents?" This is not the appraisal is it?
Anyway if you are buying with a mortgage I would certainly adjust my offer to account for the lower appraisal. And yes, you can offer 88k on a 104k list. The seller may not accept but it's not out of the ordinary and shouldnt be insulting.