Skip to content
×
Try PRO Free Today!
BiggerPockets Pro offers you a comprehensive suite of tools and resources
Market and Deal Finder Tools
Deal Analysis Calculators
Property Management Software
Exclusive discounts to Home Depot, RentRedi, and more
$0
7 days free
$828/yr or $69/mo when billed monthly.
$390/yr or $32.5/mo when billed annually.
7 days free. Cancel anytime.
Already a Pro Member? Sign in here

Join Over 3 Million Real Estate Investors

Create a free BiggerPockets account to comment, participate, and connect with over 3 million real estate investors.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
The community here is like my own little personal real estate army that I can depend upon to help me through ANY problems I come across.
Buying & Selling Real Estate
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated over 3 years ago on . Most recent reply

User Stats

227
Posts
35
Votes
Jonathan Perez
  • Realtor
  • Jacksonville, FL
35
Votes |
227
Posts

How bad is overpaying for long term duplex investment?

Jonathan Perez
  • Realtor
  • Jacksonville, FL
Posted

I put an offer in on a duplex yesterday in the Jacksonville FL area. It is a 3bed 3 bath in one unit (which is what caught my attention!) and the other is a 2 bed 2 bath. They are asking $185k ”as is” and I went in at $190k for the sake of making a strong offer and to secure a contract. The area seems quiet and there’s an elementary school right across the street. Seems like mostly of an industrial area.

They claim to have renovated it and it does look renovated for the most part. Roof looks brand new, floors, bathroom vanities HVAC units, water heaters etc. I would say there’s still some work that can be done to it as far as fresh paint and cleaning up but it looks like the bigger expenses have been taken care of.

It also has a big attached shed-like structure in the back for each side. I’m thinking we can charge extra for storage.

My strategy as far as negotiations goes is if they accept my offer at $190k I will get my inspection done, and will request for them to fix whatever comes out it and if they refuse to then I will ask to bring the price down or I will just back out. I figure this could be a good strategy to get them to come down since if they don’t then they will have to move on the next buyer (wastes time) in which then they will have to disclose what I found in my inspection and it’ll probably be best if they take my revised offer. Not to mention they already asked if we can close sooner than 30days and if we can cut the inspection time to 7 days rather than 10. Maybe a sign of desperation? 

Anyway, my question is if I pay that $190k I calculated conservatively that I will make about $325 after all expenses with the minimum potential rents and maximum potential mortgage payment. It’ll probably be a little more than that since I went conservative. Not too bad. What I fear is overpaying and the market crashing. Do you guys think that if the seller is not willing to lower or budge that I should still go through with it? I feel like it’s a good deal but I’m just fearing the price that I’m paying. I also noticed that they paid $28k in February for it. Then again consider those big expenses, roof, HVACs, water heaters, etc. Let me know what you guys think. Thanks in advance. 

Most Popular Reply

User Stats

8,152
Posts
3,689
Votes
Basit Siddiqi
#3 Tax, SDIRAs & Cost Segregation Contributor
  • Accountant
  • New York, NY
3,689
Votes |
8,152
Posts
Basit Siddiqi
#3 Tax, SDIRAs & Cost Segregation Contributor
  • Accountant
  • New York, NY
Replied

@Jonathan Perez

”as is” normally means that the seller is unwilling to do any updates to the house.

Your strategy sucks and gives real estate investors a bad name.

You mention that the house is in pretty good condition - New Roof, Floors, Bathrooms, etc.
Yet you want to go in with a 'strategy' of getting a discount in exchange for the seller of 'not wasting time'

business profile image
Basit Siddiqi CPA
4.9 stars
76 Reviews

Loading replies...