Need opinions on 5 unit counter offer
I recently submitted an offer on a 5-unit idling. It is a brick one story building with 5 units 2 bed/ 1 bath each. No major repairs needed. 3 of the units are rent ready with one of them occupied. The other two units need omelette remodel including windows and doors to match the other 3 units. The own has moved out of the country and cannot properly manage the property, which is completely paid for. The comparable rents and the rentals in the area that I know will aloof ow these units tô rent for $400\month.
The offer: I submitted a favorable to me offer because the owner seemed desperate to sell. Selling price of $51,000 witha down payment of $8,400 the remainder owner financed through land contract. The financing is at 10 year amortization 6% with a 5 year balloon.
The downpayment is a little strange. The current owner wants to continue to rent 2 of the units himself for when he and his daughter travel for business. He wants to sign a 1 year lease and pre-pay for both units at $350 per month or $8,400 for the year. He is willing to use this as the downpayment. Since he will be renting these 2 units he will renovate them to match the other units as part of the offer.
This offer will allow me to get into the property with very little up front cost, which will allow me to use my capital elsewhere. This was not my original intention but seems to work out great for me.
The counter offer: same as above except the sale price raised to $54,900.
What do you think?
I am confident about this deal but always like an outside perspective.