Is this a good deal or not? Please this is time sensitive!

5 Replies

Hello Everyone,

I am new here. I am also very new to investing in real state. I am currently under contract to purchase property 9121 Gray Fox Lane, port richey. The inspection showed the house needs some  repairs. It also needs a new AC and I will eventually need to replace  the windows as they are 40 yo. Roof was changed 2016. This is a 40 year old home, in my inexperienced opinion the house in general look good.  https://www.trulia.com/p/fl/pt...

I am seeking ot buy it, rent it and eventually (2-3 max) fix it and sell it.

Could I ask for your expert opinion on what is a good offer for this  house? There are no real comparable home that have sold around.

Thank you,

France.

@France Calle you are already under contract so it doesn't make any difference. Real estate investment is all about the numbers. You include nothing. Learn to use a rental calculator or spreadsheet. Give you a rule of thumb:1% rule. Monthly rent divided by 1% = max price to pay. So unless this will rent for $990 you paid too much.

Sounds like you are a little bit too deep in to this for the questions you are asking. Firstly, there are many different ways to analyze a deal and those "rules of thumb," don't apply to every deal in every market for every investor. 

I think what you are asking is how to renegotiate the deal during your inspection period? if so, much of that depends on how great this deal is in your market and how much interest the sellers have had. If there's been a lot of interest and you got lucky enough to have your offer accepted, you likely have very little leverage. You can ask for any concession you like, but the seller is likely to reject your request. 

If there hasn't been much interest, you may have some leverage in asking for a credit for windows and AC. I like to add a little cushion- either a higher credit or ask for some repairs that aren't essential so that I have some negotiating room if the sellers either reject or counter a proposal. 

Best of luck!

What is a good deal to one is a horrible deal to another. If it rents for $900, sells on the open market for $94k and needs many thousands in updates, I wouldn't touch it for more than $80k but others might do it all day. A lot also depends on if the tenant pays all utilities and takes care of basic maintenance, how the current tenant is, how long their lease is, what the property taxes and any fees are, etc. 

@Bryan Devitt Thank you! The house had been on the market 3 days by the time I saw it the seller had 2 more offers; one of them was a cash offer. 

@Bryan Devitt Thanks you! Sound like I made a bad deal overall. The house is not rented. Property taxes are 1.2K, Insurance ~$75. No other fees. Did not seem too bad to me, specially since I saw the potential to build an efficiency once I move there in a year.