First deal in a while! Lessons learned and analysis
So I will try to describe as briefly as I can my latest experience. Been in the market for an investment property the last 3 weeks or so. Started looking in the area I currently live in, as many people know in Hawaii and Southern Cali, it can be hard to find places that cash flow well.
After looking into leaseholds, short story= no. Then I moved over to a different part of the island hoping to find a better cash flowing property. The first potential deal fell here through, because a large number of the units in this building had enclosed their lanais, not officially to code, but this was approved by the association before any official rules were in place. Go figure. Now lawyers and 'gathering enough signatures' were involved= no.
I looked at a few 2bed/1bath places before noticing a new one (2bed/1bath/2parking) had just come on the market, and priced about $10-15k below market value. Oh boy. I knew a bidding war was going to brew, but I was interested. I offered the list price, ~$140,000, cash offer. I was told that the seller would NOT be reviewing any offers until after the first open house, set for a few days later.
After the open house, I was told that there were 6 offers already, then 9. And that one of the offers was somewhere in between the recent comps for that area: high 140s to ~$165,000, but "closer to the higher one", but with financing, not cash. I also learned somewhere along the line, that the house was owned by a mom and son, and the mom recently passed. I was suggested by my agent to offer $153k.
THE INTERESTING PART: I was ready to offer the above, then just 2 mornings after the open house, my father who was communicating with a broker in my area, was told by the broker that there were 16 OFFERS, only 2 cash. One cash offer was at list, and the other was "slightly above list". At this point, my $151,000 all cash offer was already submitted. That begs the question, was my 151 'slightly above list'?! I felt like I was overpaying a bit because I knew the seller wanted all cash and a quick close. But I was told that if I asked for any sellers assist or any offer reduction, the would accept another cash offer that was "close to mine". I knew the value here so I accepted.
Your thoughts guys!!
1. Do you think I handled the challenges well? I had to go through the above while working fulltime.
2. More importantly, what could I have done better or smoother?
3. Side note, is it okay or ethical to correspond with another broker/agent in this case. Keep in mind, my father corresponded with him and forwarded me the email.
I truly appreciate everyone's feedback and tootelige (I know spelling is horrible). And wish me luck for a quick close :)
The DEAL ANALYSIS and numbers are to follow.