1st door under contract - need advise on inspection negotiation
Hi, I’m new here. I am buying my first investment property. It’s a condo for mid term rentals. I have the property under contract and recently did the inspection. Waiting on the appraisal.
I’m trying to negotiate with the seller as the inspection revealed that the electrical panel is not up to code and needs to be replaced (got estimate for $3.6k). Besides this, there’s probably another $15K that I may need to put into the property to fix it up (AC & water heater are 2012, and kitchen is really dated but a new countertop and sink should fix it).
Purchase price is $300K plus $13.5K that I agreed to pay for an ongoing assessment (that should be completed a month or two after closing). All in I estimate I can have the unit up and running with $330K all in (purchase price + assessment + repairs).
Now the appraisal I believe will come in for $300K. The reason I was willing to pay over market price (the assessment of $13.5k) is because the condos in this building are rarely available (none have come to the market in the last 2 years). This is due to the low HOA and rental flexibility not offered by other condos in the area. I found this one door knocking.
The unit should cash flow $500 per month in low season and $800 in high season.
I want to make sure I’m not overpaying for this unit. After the inspection, the $3.6K additional for the electrical panel replacement seems like a lot. I would feel more comfortable if the seller gave me a credit for repairing the electrical panel.
In speaking with the sellers agent, she makes it seem like seller won’t pay for anything and is willing to put property on the market to see what he gets.
Any advice on how to negotiate with the seller to get a credit for the electrical panel repair. Also, does anyone see this as overpaying?