Hey guys and gals,
Im heading out to look at my first property today and i can use some help.
Here's a little about the place:
Small duplex (1,456sqft) that seems to be recently renovated. Currently no tenants ( I plan on living in 1 unit anyway). Each Unit it 2b/1 bath. Realtor.com claims it could rent for $550 per unit.
He had a buyer last week but if fell through in contracting. Its listed for 65k, would I be wrong for offering 50k? Cash offer. Im not sure what questions to ask or information to seek today . The agent that has the house listed seems confused and not very helpful. And i called today to confirm our appointment and he forgot what time. However, it seems like a decent deal for a price i can afford. The reason i will be paying cash is i'm assuming i cant get a loan for under 50k.
Any advice for this new invest that is still learning to crawl?
In my opinion a cash offer shows that you are serious and most of the time takes precedent over any financed offers that come in, assuming they are within the same ballpark. You mention that "The reason i will be paying cash is i'm assuming i cant get a loan for under 50k." What does that mean? If it's a loan from a bank, it's a loan, not cash. Are you talking about someone you know giving you the money?
@Anthony Frangieh I am a new investor also. I would check with some local banks. They may loan less than $50k and I'd run the numbers with charging yourself rent to see if it makes sense. there is alot to consider who pays water, electric, heat, ac, etc and taxes. From my experience though $550 a month on a 50k house that should cash flow nicely if you rent them both. If you live in half that should yake care of the mortgage and taxes so you'll be in a good position. i may be wrong but someone will point it out if i am alot of good info on here keep asking questions. good luck
Welcome to the world of REI. I don't think you would be wrong at all in offering $50k, especially considering it is a cash offer (assuming it truly is cash). You are basically offering the benefit of a quick close and no financing contingencies. What should also work heavily in your favor is that the seller had a buyer already, but it fell through. Come to the table with your offer of $50k cash, no financing contingency, and offer a quick close. The worst they can do is counter. If that property truly cash flows $550 and you can occupy the other side, this seems like a pretty sweet deal.
Good luck man!
Thanks for the response Roman.
I will be paying cash (50k) out of my pocket. It was always my understanding banks dont lend for under 50k because it is too small. Is this true?
Do you think my offer is too low?
Nothing wrong with offering 50k, worst thing that happens is they counter. The numbers definitely work, especially since it's rehabbed. Pay cash and then get a HELOC and go buy another property!
Thanks for the helpful responses fellas!
Any questions i should be asking the agent? Also, im not to sure about the location either. I will get a better taste if its a safe neighborhood tonight. When should i have an inspector to look at it?
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