Fooled by a high asking price - Should I continue or let it be

[Rene M.]

Hello together,

I am really new to the real estate game and even though I listened to hours of podcasts, watchedm many videos and webinars and read a lot of books in the last two month... I often have difficulty act to fully rational when I am out in the field making decisions. Especially when it comes to offers.

I am already on my offer number two and both of them got accepted. The first one was a great location in a up and coming but currently high crime are with tenants who trashed the outside and the inside of the place.  I backed out. Even though I really liked the location.

Little bit further away from the interstate exits I found another duplex I really liked. Looked nice, had the viewing. Nice friendly tenants, both places tidy, nice fenced in yard, 2 tax IDs on the property and not having to deal with another owner when making decisions.

New roof, old HVAC and a asking price of 194K for both unit. I (thought) boldly offered 171K. I checked houses in the neighboorhood an saw the last sale in 2016 for 140K - which Charleston, SC has exploded since then. I thought 171K was a fair price. 

It was a multiple offer situation so I increased to 178K and got accepted. Rent is 1650. Raise to 1800 should be possible. Monthly expenses (financing, insurance, Capex 5%, Repairs 5%, Property MGT 10%, Vacancy 8%) 1550...

Now I found another property one street further down. Listed as condo instead of townhouse or SFH (half of the duplex) for 84K... And while it looks like its in slightly worse condition... that was their asking price. So offer likely 80K or even less.

I felt happy to win an offer for 178K for a listing with 194K... but I guess this was not doing thorough enough comp analysis...

I have the inspection scheduled for Wednesday. To make this a fair marked offer I kind of would like to offer 165K with the inspection report (no clue how bad it is... house looks really good besides both ACs) and then hope to end up with 170K again. But this that even realistic? My due diligence is till next Tuesday.

What do yall think... should I:

1. Walk away before inspection and next time do better

2. Try to renegotiate after inspection and walk and walk away over 170K

3. Be happy to get a decent property, with decent tenants and dont worry about 5-6K

Here is my calculation.

As usual any justified input is appreciated!

Thanks in advance

[Caleb Heimsoth]

@Rene M. This is generally bad form making a bunch of offers and then backing out of them. Also savvy sellers will see through the inspection negotiation ploy. As a seller I hate it when people do that. Small stuff is fine but asking for like 10k off because you know you overbid is absurd.

Get your comps right next time and make that initial offer or not