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Updated about 1 year ago on . Most recent reply

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Francisca Mac
  • Investor
  • Charleston
5
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11
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Offer on my first deal

Francisca Mac
  • Investor
  • Charleston
Posted

Looking for advice on my first deal. He purchased it a year ago for $325k
Duplex listed for $396k Offered $350. He countered $373. Both units are rented with long term renters and they bring in $2450 a month. One is section 8. Wanting to counter $360. Will be a cash purchase. He is selling wanting to do a 1031 exchange. Our goal is to build a long term rental portfolio.
Any advice appreciated.

Fran… 

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280
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Denis Ponder
  • New to Real Estate
  • Yuma, AZ
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280
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Denis Ponder
  • New to Real Estate
  • Yuma, AZ
Replied

I don't know much about your market but I will assume there is above average appreciation based on those numbers.  At $360k, you are saying there is 10% appreciation; that's pretty substantial.  If you really like the unit and the area, then it's up to you.  If you are looking to build a long term portfolio, why not just go in with a downpayment and let the renters cover your expenses.  Math it out to find the minimum you need to put down for the rent to cover you.  Then sit tight for a bit, make sure it's rented and you have reserves, then repeat the process.  I suppose you can do delayed financing as well if you want to close all cash to make it a quicker transaction.  But, save as much of your cash as you can for reserves and another purchase down the road.

If that appreciation is regular/normal and not an anomaly, I see the appeal here.  I would still go in with as little cash as possible so I can purchase another property and multiply my returns with the same cash.  This approach will help you grow your portfolio more quickly, but it's all up to you.

  • Denis Ponder
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