San Antonio, TX · Member since 2016 · 91 posts · 23 votes
My wife and I are looking to owner occupy a fourplex. I found a triplex that was distressed and the owner bought it at a foreclosure for $116,000 last February. The listing price was $234,000 and the largest unit was just ransacked. Smoke, urine, torn up everything.
I saw all the unused space and found a place to add a shower to make a full bath. We were excited.
I offered 165,000 using 70% of the ARV (I believe it’s about 235,000) or 180,000 with seller financing. They turned it down and said it’s nowhere in the ballpark.
165,000 was pretty much the highest you could go while still appropriately cash flowing.
I guess this is really how real estate investing goes. Time to find another one!
Investor · Marbury, MD · Member since 2017 · 52 posts · 57 votes
8y
Found a single family residence for 105 list price, arv 230 with 40k reno, i figured i would go in 90k max offer but submitted a 70k offer, the bank rejected it lol. Went back at 80k, they countered at 101. I ignored them for a few days and the agent kept asking my agent if that was my final offer, went back in 85k, been a few days bank's agent said i should hear something by Monday.
Contractor · Oxford, MA · Member since 2018 · 807 posts · 745 votes
8y
Congrats on knowing your numbers and sticking to them! Good luck finding the next one, eventually you'll find one that you can make money from and it will all be worth it
Real Estate Broker · Salt Lake City & Oklahoma City · Member since 2018 · 3k+ posts · 2k+ votes
8y
@Account Closed Good work! Be doubly and triply sure of your numbers and let them lead you. Sellers and seller's agents (if it is listed) become emotionally attached to the list price far too often. It anchors them to a certain position and they reference offers based on that number instead of the reality of the sale, to everyone's detriment most of the time.
Investor · Marbury, MD · Member since 2017 · 52 posts · 57 votes
8y
Found a single family residence for 105 list price, arv 230 with 40k reno, i figured i would go in 90k max offer but submitted a 70k offer, the bank rejected it lol. Went back at 80k, they countered at 101. I ignored them for a few days and the agent kept asking my agent if that was my final offer, went back in 85k, been a few days bank's agent said i should hear something by Monday.
Real Estate Broker · Salt Lake City & Oklahoma City · Member since 2018 · 3k+ posts · 2k+ votes
8y
Hey @Errol, why walk away from this deal? At a list price of $105k and $40k of renovations, you'd be all in at $145k plus (let's say) $6,000 in closing costs and lender fees for a run-of-the-mill title and lending company. So, you're "in" for $151k on a property that would sell at $230k? That's 66% of the ARV, so . . . BRRRR it's cold in here! Or, get a savvy agent who can market the socks off that thing and figure 7% cost of sale and you'll clear $213,900 from the sale and you were "in" $151,000. That's nearly $63,000 profit. . . . that'll get me out of bed in the mornings. How about you?