Closing on two deals soon - Need advice!
Hello BP Mates,
I'm excited and nervous that after almost two months after putting these two properties under contract, we are days away from closing. I'm hoping to get your advice on something considering this is the first time I'm purchasing investment SFH and it is out of state.
We are in the appraisal negotiating phase.
House A is priced at $90K and appraised at $87K. House B is priced at $85K and it appraised at $88K. They are in the same neighborhood and are similarly sized houses and similar quality. The same REI investor seller is selling both houses. The seller agreed to drop house A to $87K but wants to raise house B to $88K, essentially not changing anything. These are both rental properties this seller needs to sell in order to clear his D\I ratio to get a loan for another type of business.
Keep in mind the seller had to spend $5-$6K on each property to fix major issues like new roof, hot water heater, and foundation and I waited to get appraisals until after the inspection items were negotiated. However, these are by no means "turn-key" as flooring, fixtures, and finishes are C grade at best. (It is a C+ neighborhood)
I'm conflicted:
1. Do I accept the counter because it is "fair" and end up with a deal: House A $900 rent $87K purchase, House B $875 rent and $88K purchase
2. Do I counter and request the lower price on House A and House B price doesn't change and end up with a better deal: House B $875 and $85K purchase
Part of me feels like I should be a savvy investor and be aggressive in getting the best price possible. The other part of me feels like saving the $600 down in cash and the pennies per month from $2400 amortization isn't worth potentially losing the property or both. I've already spent $2K between appraisals and inspections and almost two months of my time waiting. The relatively low numbers won't make or break my path to financial freedom.
Do I risk losing both deals for $3K (3.5%) of equity? What would you do?