I’ve been analyzing and offering on houses a lot in the past couple of weeks trying to get my first deal. I found a duplex that is a little rundown and could use some work but if I’ve done my numbers correct, I would cashflow 200$/month/unit if purchased for 40,000$. The house is listed at 49,000$ and my REA suggests I offer 35,000$, however, I’m using conventional financing and can only go as low as 40,000$. So I’m in a pickle, should I offer 40,000$ and just deal with the fact that I could have got it lower? Do I just move on and try to find a deal within my approved mortgage range? I would like to follow her advice because this is my first deal and she’s been doing this for a lot longer than me and probably knows the value of the house better than me but I don’t want to miss a deal.
As I type my forum posts I usually end up answering my own questions and not posting it but I realize that it can’t hurt to hear what everybody has to say so I’m going to post this anyway with the conclusion I've come to.
My conclusion: I can hear the voice of Brandon Turner echoing in my head ”Your first deal isn’t going to make you rich or make you broke. It’s all about getting that first deal done, learning from it, and moving on to the next one. It takes a lot of energy to get a train started but once you get it going it’s hard to stop”. Basically, I realized that I shouldn’t be worrying over simple little things like this and I should get in with it and make an offer. Possibly getting a house for 5,000$ less is pretty inconsequential in the long run. Thanks for listening to my ramblings.
$200/mo per unit CF is good. Go for it.
@Jonathan Lubenko , yeah get the deal done. Maybe you offer $40k with $5k back from the seller at closing for renovations.
$200 cash flow is very good for a property at this price point. Can you share your numbers? Sounds a little too good to be true.