Buying Off Market Deal - What To Know

[Art Maydan]

I'm looking for a multi-unit to house hack and saw a 2-flat being rehabbed a few months ago while looking at another house. I talked with the owner and he bought a single family home, spent 6 months getting permits, did a gut rehab and turned it into a 2-unit. I liked what he had going on, so I got his number.

I went to see the house today and it looks great. Everything's metered separately, tankless water heaters, efficient everything, looks great, etc. When we spoke the first time, I asked what he'd be selling it and he said around $250K. I think it's worth more. Today, he said $280K. I said how about $270K with closing costs baked in. He said, 'Yeah that would probably work' without much hesitation. That's still an 11 cap.

He asked me what my financing was and I said FHA. He said he'd rather not deal with that, which is the consensus I've been gathering. We already had an above-list price offer rejected with FHA financing. My lender said he'd do 5% down conventional, so I called the rehabber and said I want the place, I'll do conventional, and what's my next step? He says he'll talk to his lawyer Monday and let me know.

So two broad questions:

1. What should I be doing to increase my chances of getting this place? Sounds like he's fine with the price, and I'm doing conventional financing now. It's not on the market and he's keeping it that way. We really want this place. How do we make it even more desirable/easy to sell it to us?

2. What should I do when buying a house without a broker? I assume I need a lawyer at minimum? How do I cover myself? Any advice in general?

Thank you!