Informal negotiation

[Dave Defourneaux]

Hello Everyone!

I have some questions about talking with potential sellers. I currently rent a room in a house that i live in part-time. Long story, but basically I commute between two cities for work, so this is my home-away-from-home so to speak, and the house is currently FSBO. It is a good property in a good neighborhood and would be perfect for a cosmetic rehab and flip, or to continue as a rental (with me on the other side of the table). I believe the owner is asking too much. He has it priced accordingly for the area, but most comps have 2 baths or at least 1.5, and this is a 3/1 house, and he feels it is "move-in ready". It is in good shape, but having lived in it myself for nearly a year I have a good idea of what it needs rehab-wise (minor cosmetic, but definitely needs a complete kitchen rehab, and could probably use at least an extra half bathroom).

I'm not quite prepared to make an offer but I'd like to start an informal negotiation with him. As this will actually be my first conversation with a potential seller while representing myself as an investor, I want to approach it correctly and professionally. We have a tenant-landlord relationship already, so we aren't strangers, but nor are we really familiar with one another.

How do I start the conversation? What are some good ways to figure out how motivated he is to sell and what numbers he might be willing to play with? I don't have an exact value on the house myself yet (I have a ballpark figure of my offer), but I want to see where his head is at with the sale. I believe he has full equity also and could possibly be willing to seller-finance. How do I work this into the conversation?

I would really appreciate any advice on how to proceed.

Thanks for the help!