Outbid, lost the REI property
Well, after going gang busters on BP podcasts, working the BP calculators, working thru and finally getting the financing worked out, finding a good property, making an offer then a counteroffer, we got outbid and the last counter was $5K above the owners original counter. That was not going to happen, it was too close to not cash flowing and maybe going into the negative. So consider this my open retrospective and any advice going forward I am very happy to entertain. I'll add some more detail below for perspective.
The SF home was in a good neighborhood which has rough patches but is basically improving. The owner did a decent job inside and was 95% ready to move in for rental purposes. We budgeted about $500 on a new bathroom door, some molding repair, some painting. We budgeted another $2K on a new fence and some sweat equity for landscaping.
Asking was $199K house was listed for >30 days, maybe 40 days at this point. My calculations were to make >$200 I had to get no higher than 185K so I offered $177,900 as the opening offer and asked for a single condition in the sale: please remove the hot tub.
Owner came back with 190, after thinking hard and talking with both the realtor and my wife we came back with a generous $186,900 offer and withdrew the hot request (I figured I could give it away). Another offer came in right around the same time and the seller came back with something like: "another offer came in but because your buyer is a strong buyer we will sell the home for $195K".
Did I just dodge an attempted bidding war tactic setup by the seller's realtor?
My wife seems to think that I made a mistake. She's mentioned we made a mistake 2x and I told her I don't see what I could have done. In my mind I need to stick to the numbers and use the math. She says it was a perfect rental for us. I think we would have overpaid and it would have been a $50 month loser (or more at 195K).
I'm also wondering if I tipped my hand to the wrong person. I mentioned this on here but I can't see anyone REI minded making the deal work at 190-194K unless they're paying cash or has a <3.25% interest rate loan. My thoughts are that I lost to a homeowner that really wants to live there, which if so, I can't really feel bad about. I'd live three if I was 30 and single!
I'm also thinking about changing realtors. The one we're using is great but he/she is a good seller's realtor in my mind and wasn't really forthcoming in good ideas about the whole process, what a good rent might be (still a bit of a puzzle in my mind), etc. so I'm looking for a realtor that might be more BP minded and have experience with REI from my perspective and have good ideas and be willing to share them somewhat as a mentor.
Thanks for any advice. I plan to keep looking but the wind has definitely left the sails a little. Just trying to rally mentally on this setback.