Advise Me On Counteroffer For Triplex
Hello all,
I have gone back and forth with this seller. His RE agent is making demands based on HER needs not the seller. She asked me to change the close date so she could "close out" her year. I didn't want to evict three families before Christmas so I chose the first week of Jan. After a few of these requests I had my agent ask for the written counteroffer - she says it isn't signed yet by the seller! Who am I dealing with?
She also wants me to remove the verbiage," &/or it's a$$igns" from my contract!
She also wants me to provide a letter of committment when I have already told her I'll provide my prequalification letter.
The deal is this:
$160K SFD (illegal tri)
$full price offer
Seller pays $5K of Buyers closing costs
$2100/mos rent revenue
Should I purchase a home warranty ? - the appliances are all dinosaurs.
What would all of you say the value of this property is? Do I use the proverbial 1% rule? Rent rev is usually 1% of market value?
Any experts out there? Please advise. 
Sorry if this seems petty but it is my first rehab. Please give me some feedback so I know if I am estimating it's value properly. The rents support a value in the $230K range. The prop appraisers office values it @$175K ( which is usually about 75% of market value - which would place it at $233K.
If it were fixed up rents could be raised. Anyone awake tonight to help?
Thanks!
So far it sounds like a good deal, but I dont know your rehab costs. Additionally your sidenote of ilegal worries me as to the costs of making it legal. Personally every change that they made to the contract, I would offer less or ask for more with each counter offer. If the realtor wants to close out by year end, then you have an advantage if you can close that early, offer a little less if the closing date is before christmas or more closing costs etc.
Good Luck,
Kyle
The rehab costs to make it a legal tri was $14,000 not incl electrical ($8). I am guessing worst case of $30K.
This morning I am being told there is "another offer " coming in. I know its a good deal - but - do they always have to BS with that phrase? or do I believe her and cave in?
With those rehab costs you are buying at around 90%, which puts it at a not so good buy, unless the rents are raised to make it worth it. I usually start my bidding at 60% of FMV I will go up to 80% and very very rarely up to 85-90% of FMV. But you know more about he job then I do, so there are probably factors I am missing as well. If you can close in three weeks, and you want it that bad, tell her to droip the price or pay all closing costs. I dont care whether there is a counter offer or not, go forward like a typical negotiation. If they want something then they need to give something, its that simple.
Good Luck,
Kyle
I am unsure of how to guesstimate the value of this property. The neighbor's 2 properties ( both in equally fair condition) sold for $69 and $89/sq ft. At the $69/sqft my prop is $180K. At $89/sqft mine is worth $231.
I don't like to use $/sqft but the only other method I know is 1% rule. The rent $2100/mos is 1% of the value $210,000.
The rent would support and asking price of $250K.
I'm confused.