First time Roofstock deal.. how to know if I am overpaying??

[Gre Clifton]

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!

[Tony Kim]

Originally posted by @Gre Clifton:

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!

That little switcharoo they pulled with the A/C unit would be a deal-breaker for me. God only knows what other stuff you'll discover once you buy the property. If they can't be trusted before the sale, I wonder how bad it would be AFTER the sale.

When it comes to turnkey properties, I understand that we will be buying at a bit higher than the surrounding neighborhood.  TK companies need to make a living too right?  So you pay a little premium because they can fix up, market and rent a property much better than we can as investors living several states away.  With that said, I would only be willing to pay that type of 20K premium on an actual TK property. To me, a property with a 21 year-old A/C unit is not a turnkey property. This is very different from the type of properties offered by an actual TK property like Smartland or Memphis Invest.....whose properties are FULLY rehabbed and actually look good enough for me to live in. I see very little reason to pay the TK premium on properties listed in Roofstock, which is nothing more than Redfin for investors with a few extra features attached, like the inspection report.