How to negotiate prices

Question

Charlie MacPherson · Answer

Hey @Emiel Barbosa  I know the property you're talking about.

The east side of Brockton isn't all the agent is cracking it up to be.  The west and far north are much more desirable.  This isn't really even on the east side, except that it's east of the center.  In other words, it's in the least desirable part of Brockton - at least in my opinion - and I've sold multiple properties in Brockton.

This property is a boarded-up mess.  They indicate that both units have "galley" kitchens.  Translation: TINY kitchens.  NOT a selling feature

This agent says NEW SFRs are selling between $330K and $430K.  In the last 6 months, the most expensive SFR in that zip code built since 2015 sold at $329,500.  And that's brand new construction - you'll have a duplex gut rehab on your hands.  The other two sold at $300,000 and $305,000.

And since when are NEW SFRs a viable comp for a wreck of a MFR?

To top it off, the agent says the rooms "very spacious" and it has a total of just 2007 sq ft of living area for 2 units!!

In my opinion, this property borders on actionable misrepresentation.  If one if my agents ever wrote this description on a property like this, I'd terminate their contract in a heartbeat.

Contact me if you really want to see it, but I think you can do MUCH better.

Nelson Fernandes · Answer

@Emiel Barbosa, I'll have to agree with @Charlie MacPherson. The East for the most part isn't that great since it's the farthest away from anything. West Side is almost always a sure bet and some parts of the North Side, along N. Quincy Street. Also, you might consider looking at the South Side, along Copeland Street or even off Plain Street. I just signed a P&S for my first flip which is off of Plain Street, (single family colonial listed at $374,900, accepted offer above list price). I would stay away from anything between Warren Ave and Montello Street since that's probably the worst place in town where most of the gunshots go off.

Andrew Johnson · Answer

@Emiel Barbosa For whatever it's worth, if it's your first deal (you did mention you were new to this) you might want to take on a "lite rehab" first.  If you stub your toe on a $20K rehab and it costs you another 10% it's a $2K stub.  If it's on a $100K rehab that's $10K.  Don't get me wrong there's a "right price" for everything, just make sure you have a little extra margin because your "right price" has to include a learning curve.

Andrew Johnson · Answer

@Emiel Barbosa The short answer is "yes, you base it off of comps in the area" but @Bob Okenwa is right in that a local realtor who is active in the market should have a great understanding of the value.  "Sold" prices on comps are one thing but if they've toured the properties, know the condition, etc. they might be able to either supply you with: 1.) more ammunition to help make your argument or 2.) an understanding that the property is priced properly.  And if they're working for you they'll make the argument on your behalf.

That's assuming that by "homes" you mean SFRs or at least something that isn't a 5+ unit apartment building.  Those are another animal entirely.  At the end of the day, crunch your numbers and let them know that you're an investor and Property X only works for you at Price Y.  Odds are you'll get a heck of a lot of "no, thank you" responses but if the property ages because it isn't priced properly for the market, you never know who's going to come back around.

You can also negotiate with other variables: all cash purchase, 3 days inspection period, 2 week close, etc.  Time and certainty are valuable commodities that you may have that an owner-occupant going through the mortgage process doesn't.

Anyway, this is all a little vague and nonspecific but those are just my initial thoughts.

Bob Okenwa · Answer

@Emiel Barbosa

Having a realtor would really help in this instance as they would know the area and would be able to use their expertise in getting a better deal. Otherwise, you should focus on what's wrong with the property and how buying from you can help the seller resolve whatever issue they are trying to resolve. If the house needs work, let the seller know that in it's current condition, it only works for you at a certain price.

Emiel Barbosa · Answer

@Nelson Fernandes Hello Nelson, thank you for the advice. I am definitely considering that as I continue to look for homes. I would love to hear about your experience in Real Estate thus far...I'm interested in flips as well as Rent and Holds. Currently I am looking to buy a MFH and owner occupy for a year and renting it all out. If i can though, I would love to do a flip first to provide income to further invest in other properties....Again, I would love to speak with you about the market and RE in Brockton if you dont mind. Please let me know.

Thanks,

Emiel

Richard Gabriel · Answer

hello

I'm trying to join the local real estate investing club in brockton,MA or the Plymouth county.

Please someone can help me

Richard Gabriel · Answer

Hi Nelson

Thank you for your advice. I just finished to read the Ultimate Guide to Real Estate Investing, and I am reading now fixing and flipping. I am taking a real estate class at metropolitan school. I would like to take action now, but I just want to meet with some investors in the  Plymouth area.

Thanks again Nelson fernandes

Richard

Nelson Fernandes · Answer

Hey there @Richard Gabriel, you might want to read the Ultimate Guide to Real Estate Investing ebook that is available for free here on BiggerPockets. It's an easy read and will answer most questions you might have.  Brandon Turner's book on Low and No Money Down Investing is GREAT and J. Scott's Book on Flipping Houses is also a GREAT read.  I think your best bet is to read those first, and educate yourself on all the options before reaching out to an investor for advice, you'll have better luck. Once you have some knowledge under your belt you can always join a few Real Estate Investment Groups as well. But, to get your started I HIGHLY suggest you read as many of the book available on Bigger Pockets.

Richard Gabriel · Answer

Hello

I'm in brockton are also, I'm looking for an investor for some help. I'm trying to learn about the real estate, more likely  I would like to start flipping and wholesaling. Please anyone who can help me, will be a pleasure for me.

Thanks in advance

Richard

How to negotiate prices

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