We put in an offer which was accepted. What do you think about this:
1) A week ahead of time, they knew that the inspector was coming . . . yet the water was still off. There were enough plumbing repairs needed that we just figured we'd have him turn it on for the plumber to take a look at it. A local plumber said that it could be about $800-2000 for the range of things that might need to be done, based upon the inspection results.
2) From our guestimates, the house needs about $8K worth of work, unless the plumbing is worse than what we think. There is an assortment of electrical, plumbing and general handyman work which needs to be done in order to rent it. We plan to do a BRRR.
3) Our offer was for $45,000 for a small duplex (one BR each unit). We were thinking about retracting our offer and resubmitting for $37K (asking price was $49K and it might be worth 56, fixed up). Rents will be about $900 total and it's in a C area, 5 blocks from a small college.
If we were local, we would jump at this...but from far away, we are still wanting to walk into this carefully. We would love to hear your comments—good, bad, otherwise! I have the inspection report and if anyone is curious (general curiosity or to put in an offer to do the work), I'd be glad to post or message it.
Well a few things. The out of state would give me caution, as well. However if you haven't been bidding on stuff much and/or haven't gotten the feedback from people in the know - for properties in your price range and when they need a little work - banks usually balk at underwriting them. Our philosophy has been to give the cash offer at something that covers your risk and construction budget, and not get into these nickle and dime time of things where you try to re-negotiate based on things that come back during inspections.
After all, when you want to get the property that produces cash flow, there are others you are competing against in offering.
I just think in the price range your at, you need to decide if that house is worth it. If it's not, get out.
Next time, be prepared to do the work at your cash offer, in my opinion.
If you are utilizing financing for the project, I'd ask if your financing will even come through when you start documenting plumbing, etc issues?
Any property at this price point is always going to need a ton of work. You got to go into these price points eyes wide open and accept that fact.
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