Looking To Purchase...Need Advice On An Offer??
Hello all..
I am looking at a Triplex over the weekend that is fully rented. It is a FSBO and I am wondering what should I offer? He is asking $90,000, but I have drove by it and it looks like it needs cosmetic work done to it. It is in a nice area though...seems to be the only unkept one on the block (there always seems to be one!). Anyway....what should I use to determine an offer price?
Thanks....and sorry I dont have anymore detail to give, because that is all I know right now.
Chris G
P.S. - Also, landlord is currently paying utilities. 
Do you have any comps? Take a look at the tax records to see what nearby triplexes/duplexes are selling for, and do a drive-by to see what the competition looks like. Also, did the owner disclose the amount of the rents, and the lease term (i.e., how much longer can you expect 100% occupancy)? You can use those numbers to calculate cash flow...
[ Edited by mandiland on Date 04/29/2004 ]
Man, I wish I lived somewhere else - you can barely buy a crack house down here for $90k!
HAHA...Thanks for your reply....Yeah...he said the rents are $500,425 and 450. Like I said , I am not sure which is rented out at what prices.
Where is a good place for me to check out comps online for a property like this?
Thanks again
Chris G
Chris
Can't do it in Lawrence County on line>
Lori
If the property is listed, ask your RA for comps. Is the property Comercial or Residential?
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real estate investor since 1988. I like to find creative solutions for my real estate headaches before they become problems. Most importantly, MOVEMENT DOES NOT EQUAL PRODUCTIVITY[ Edited by tinman1755 on Date 04/29/2004 ]
Thanks for your response Tinman...
The property is residential.
Lawrence County since to be a terrible place to find any values on property...even from the county website!! I wish they had one like Allegheny County.
Thanks again
Chris G
Ok, so get the operating income and expenses out of the seller. Add some expenses for maintenance which he does not appear to be doing.
Its worth 10 times the NOI 9 times is a good deal 8 times is a very good deal. Make him an offer at 7.
Thanks commercialking,
Once I get more numbers to crunch, I can actually see what I am looking at. I will use what you said when making decision on an offer. Any other suggestions are welcome as well. I guess I can't really do much more til I have more figures in front of me though.
Chris G
Make sure to ask to see 2 or 3 years of the Owner's tax returns during your free look period. This will either confirm/not confirm the income and expense figures provided by the Owner.