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Updated 12 months ago on . Most recent reply
Am I crazy ? or is everyone else ?
My wife and I are looking for a two family to start with for our 1st home. Every home we look at is going 50-60k over ask. Recently, 2 we were looking at went 100K over ask. I can't make sense of the last 1. It was on the market for a week. The asking price was 575K, which, in my opinion, was a very high asking price. It was purchased by a flipper on 12/13/2023, just 6 months ago, for 395K. He did a terrible job of fixing/renovating. They were issues that did not meet building codes everywhere. The roof had 2 layers and needed to be completely replaced. There was a fire escape staircase for the upstairs unit that was made with wood( not metal that was about to fall apart. The attic was unfinished, and there were signs of rodents everywhere. There were several holes in the siding that were replaced, but it was done terribly; you can see cracks in the siding everywhere. I could go on, there were many more issues. I would estimate it would cost 75-100K just to make this property liveable.
IT JUST SOLD FOR 108K OVER THE ASKING PRICE OF 575K. There is no way in hell the property appraised for nearly that much. Who is buying this property? is it an investor buying for rental income? if so, it will not be cashflow positive. Is it a new home buyer that their real estate agent is taking advantage of and convincing their client that this is a good home and worth that much? what is going on?
Please, someone tell me I'm not the crazy one for walking away from deals like this. What am I missing ? who in their right mind would buy a property like this for that price?
Most Popular Reply
You're not crazy. People pay a price for various reasons. They have capital they need to invest, maybe a 1031. They were told real estate was a great investment, and decided to invest.
Some people want to live in a certain area. You need to create your own buy right criteria and stick to them, and when a deal crosses your desk that makes sense, you'l spot it right away.
We've walked away from dozens of deals. If you're not walking away, you're not in the business. Ooh, and by the way, every once in a while, mistakes happen and a deal does fall in your lap.
The 100-10-1 rule isn't too far off
Gino