LowBall offer on 10 years old listing, Goverment building

3 Replies

I found an old 103 year government office building I really like, its been on the market for 10 years.  There are several older 60-120 year old goverment buildings the city doesn't know what to do with. They are trying to sell them and entertaining the idea of non-profits taking them over at the same time.

I have been pre-approved for a loan.

Would a 50% offer be reasonable on a  property with these conditions that has been on the market for a decade?

It might even be a bit high.

I would attempt to determine how much deferred maintenance and cap-ex will be required to be performed on this building.  My guess is that it is quite a bit.  After that, I would look at what your cash on cash return would be at different offering prices, and make an offer based on that.  You are dealing with a city as a seller, not an emotionally attached individual, so you don't have to worry about offending anyone by making a lowball offer.

Originally posted by @Brian Schmelzlen :

It might even be a bit high.

I would attempt to determine how much deferred maintenance and cap-ex will be required to be performed on this building.  My guess is that it is quite a bit.  After that, I would look at what your cash on cash return would be at different offering prices, and make an offer based on that.  You are dealing with a city as a seller, not an emotionally attached individual, so you don't have to worry about offending anyone by making a lowball offer.

>I really appreciate the input, I would just like to close the deal but don't want to cut my nose for more money when I don't have too. I am happy to know I am well within the ballpark.