Need assistance negotiating here. Seller is pending divorce and their home has to go. Location is hot. I recieved two CMA reports from two different agents putting the home around 268-272k ARV. Owner owes 160k on the mortgage has basic understanding of his home's value. He want's to cash out and maximize. I offered 213K-cash, he countered with 245K. Just before I responded, I decided to come here and get some opinions. I want to offer 220K and thats my top. What other options can we create here? I can let him know that since I won't buy it myself at 245K, but I can find a buyer for him and take my assignment fee? I don't want to let this deal slip and go to some listing agent, especially when owner doesn't want to pay commissions and rather go FSBO.
what is your intent with this property? flip, rehab and sell, buy-n-hold?
Going with the lower number of 268, at 220 you are buying at 82% of market. You are going to find a buyer, for a fee. So even if you add only 3K to your price, where is the benefit for the investor? this would only work if you have (1) investors paying 82% of market for property and that would assume that the property needs ZERO work.
IF you have investors paying 80% of ARV then you need to aquire the property at less than that, back your fee out and purchase the house for less than 220K.
Any other scenario and you need to buy way lower.
Ex. wholesale to a rehabber (for my area so your fixed/rehab costs will be different, assume it needs 20K in work)
ARV $268 less $20K fixed costs less $20K rehab less 15% profit for rehabber (40K) less $5-10K assignment fee - max offer I can make to seller... $178,000.
Maybe you can do a sub-2 and offer him some cash. I don't know enough about sub-2s to elaborate.
My intent is to wholesale to a landlord. Home needs no repairs and is rent ready. Maybe paint and a carpet wash. $5K Max. Landlords here are paying 80-85%. Seller is pretty firm on price and willing to list at full price.
@Ulises Romero I stumbled on this post and am curious as to what was your decision? These scenario type post really helps as I begin wholesaling.
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