Negotiating by sharing my analysis with seller

[Brendan L.]

Duplex, 3br/1ba each unit. This would be my first. My analysis shows that after everything, with current rents (I believe to be 100-200 under market), renting both sides, and budgeting for property management, I would break even on cashflow at best. 

Now, there are definitely ways to make money (e.g. not hiring PM, raising rent out the gate, converting attic into a room), but naturally I want to get it as low as the seller will go. Should I show the seller my analysis and ask them where our numbers differ? How would I go about that with their agent? Just ask my agent to submit a worksheet with my offer? Or can I submit the worksheet and ask them to come back with a number they're looking for and or rationale why their original asking price is right?

[James Masotti]

Originally posted by @Brendan L.:

@James Masotti ,  Thanks for that. 

-With appraised value, is there a decent way for me to see what that roughly is without hiring an appraiser myself? How close is the town assessor's office?

-How do people successfully get offers accepted under original listing price? 

 1a) You can ask your buyers agent what the value is. If they're worth having around they can provide you this number. Likewise you can take advantage of things like Zillow, Trulia, Realtor, Redfin, etc. in order to come up with your own value based on comparable properties of size and neighborhood. Whatever you do though, DO NOT look at the estimates these websites generate. You much doe the math on your own, their algorithms for calculating current value are absolutely terrible. 

1b) Properties in Wilmington, DE, where I invest, have not been reassessed since 1983...so the values are WAY off. I mention this because the answer is...it depends. Some areas do assessments ever few years or even every year if it's a hot market and they know prices are going up. Point is do your own research and determine this for yourself.

2) You make 100 offers and get 1 of them accepted. You buy off market. That's basically the way you buy things under the asking price at numbers where it makes sense for investors. You need to remember that real estate markets are designed to cater to retail buyers. As such to make the numbers work you need to put in hard work, time, and/or money...in order to get something at a large enough discount so that it will cash flow.