Is "sellers concession" worth it?

[AL-Teef Jones]

Hello BP Members,

I am currently in a particular folk in the road towards my first property.

I have one property that a REI is offering me, its a 3-family in Newark, NJ he's currently rehabbing the place now. House is in an area little rough around the edges and the house is right off of a major highway.

He's asking for $365K on the property, with "sellers concession" on the closing close .

I under the investor wants his return on value after rehabbing. He's levering the "sellers concession" saying the average closing cost is $10k plus but I'm not sure about that. Its kind of like the "sellers concession" is rolled into the total value of the house anyway.

 I just feel the price point is well over market value for the city of Newark NJ even if it'll be a turn key 3-Family. its to the point where I'm partnering up to satisfy lender requirement. I like to project my numbers from the standpoint of "Can I afford this house if it goes unoccupied for extended amount of time?"  With that in consideration I'm afraid the numbers are to close to the bone. Plus also at $365K I feel there's no room for equity.

My realtor just showed me another 3-Family in the same type of area that is currently listing under $100K I'm going to look at the house this weekend. From what I've seen so from it looks like this house would required some rehabbing.

If anyone could give my any insight or advise on this situation I'd absolutely appreciate it! this is going to be my first properly and I don't wanted to handcuff myself by make an uniformed decision.

any advise would be appreciated.

[Mike Cumbie]

Hi @AL-Teef Jones

If he is offering 10K concessions and you are not wanting them you can reduce the price and remove them. They are essentially closing cost assistance. I can't imagine that if they were removed dollar for dollar a seller would have an issue, but I will admit, I don't know the whole situation. I would guess he offered them to build a bigger pool of applicants to pull from (Those without enough down)

Good Luck!