Hey BP -
Looking for some advice on what would be your max offer for the following property. Here is the basic numbers:
Asking Price $85,000
3 Unit: Unit 1: 2 Bed 1 Bath Unit 2 & 3 1 Bed 1 Bath
Unit 1 Rent: $600
Unit 2 Rent: $500
Unit 3 Rent: $500
Total: $1600 mo.
Lawn/Plow: $40 (Small yard) Would actually mow this myself but still budgeting a small amount.
Repairs: $100 estimated - property is very well maintained.
Management Fee: $0 Self manage
Tenants pay electric & heat source is electric.
Total Expenses: $485
I have to have my best and final offer in asap and I do not want to lose this over a few dollars. What would you offer as your best and final?
As always, thank you for the help and input!
@Jamin Olds those low rents are tough. I would offer somewhere between 50-70k probably.
@Caleb Heimsoth Thanks- it is in a very small/low income town where I grew up.
Why not offer full price? I don’t know your market and you likely underestimated your expenses, but in a lot of places 85k for 1600 in rent and about 500 in expenses would be a good to fantastic deal these days. One unit covers your expenses, one unit covers your mortgage, and the third unit is profit. Consider that people who use the 1% rule should be willing to pay around 160k for 1600 in rent.
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