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Updated about 6 years ago,
First time Roofstock deal.. how to know if I am overpaying??
HI! We are very new to this and are in process of making our first purchase through roofstock. We made our bid and it was accepted and before signing the PSA did more research turning up info that the property is owned by an LLC that is mixed with some people who also work for Roofstock. We also discovered that the property had only been purchased by them 3 months ago at 77K and they are turning around and selling it at 100K after only putting a few thousand into it (as disclosed on the reports provided). Before we bid on it, a rep at roofstock told us the seller would be replacing the AC unit and we though that was really good, but in reading the PSA that was not in there. When questioned they said they fixed it and the 21 year old unit would not be replaced.
The comps they provide read that the house is valued over 100K but now with probably needing to replace the unit in the next couple of years if not sooner, that ups our investment to 107K. It still brings a cap rate of 6.3% which we think is pretty good and if we buy and hold we are still making more than our money sitting in the bank...
Then we actually started looking at properties on the same street (not fixed up, but comparable sized and year) for the same $70-80 K price range.
So, we are not sure now about how to proceed. The seller won't negotiate.
We don't want to be suckers. Please advise!!
Thank you!