Good afternoon BP, I hope you're all doing great!! Okay so I found this possible deal here in Elizabeth NJ. Multi with 2 units and finished basement, 3 separate electric meters. Also two car garage and drive for 2 cars.
Cons, no backyard, and 2nd floor kitchen small and unfinished ($2k- 3k to finish). Basement and 2nd floor no gas, all electric. Property is completely vacant. Found a note on the kitchen counter saying gas leak found.
Unit 1: $1,200- $1,300
Unit 2: $1,000- $1,150
Basement: $850- $950
2 car garage with loft- $400
Year taxes $10,500
The seller is a invested herself and she's getting rid of this property and keeping her other luxury properties. Now dealing with such an experienced seller/ investor how can I negotiate this property?
Thank you in advance!!
@Carlos Rodrigues I am not an experienced investor myself however looking at your situation I would question if the other investor is herself that experienced. Find out why she is motivated to sell. Maybe she doesn't like the area, had some family issues, you never know what people are going through.
Also what Strategy are you looking at here? Flip, BRRRR, B&H? Perhaps the investor is overworked and just wants out, maybe you can talk to her about seller financing?
A lot of options but they all start with identifying the need and pain point of the seller. Lastly, Negotiations don't start until you make an offer, so make one!
Best of luck, let me know if I can help!
I agree with @Zachary Lamb about finding out Sellers motivation.
I have a few questions. How long has the property been vacant and why? What conditions is it in? How much Rehab will be required? Is the basement legal (appraised)? How did you establish rent rates? Did Seller provide past rent rates? Or, did you estimate based on market rates? What are expected operating expenses? Gas leak! Can you covert to all electric? I do have more.
Sorry for all the questions. But, these are things you need to answer to be able to negotiate effectively with the Seller.
This is an income driven property acquisition. It must be able to cash flow after you purchase it. The Seller should understand that. Since it is not currently providing income then the purchase price is extremely negotiable. And as suggested "Seller Finance" might provide a win - win situation.
Hope this helps gets you going in the right direction. :)
Okay thank you guys. I'm probably going to put in a offer since I did the math using the rental calculator and other methods and I can cash flow at $225k but I have a list of what I can say why I came to that price. Property fully vacant, second floor tiny, no finished kitchen, no backyard, low rents for the area, no gas hoo up in 2nd floor or basement and gas leak found by public service. $225K Best and Final offer. Any other ideas? Thanks everyone!
I think is too much for a buy and hold property in Elizabeth city. I been on the lookout for Newark and Elizabeth city. With $225k you could find others at much lower rate but need some work with plenty of equity.
But if you say that property is AVR at $350k and up then crab it, but if not then go to the auction and buy yourself 2 for that amount.
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