What's the right offer????

[Akram A.]

Hi All,

I'm new to the forum and hoping for some guidance!

I'm about to put an offer on a property that fits my criteria and goals. However, I'm a little confused on my proposed offer. The seller is asking $259,000, which is reasonable as it's in a B class area. I also did the calculations based on the seller's asking price and the CAP rate is high 7.8 (CAP rate in the area is 6.5), positive cash flow and high ROI.

Comparables in the area were sold at a CAP rate of 6.

I feel the property is a catch, so my question is, knowing the numbers make sense, should I put an offer based on the full asking price and try to negotiate during due diligence (I know some of the Windows need to be repaired), OR should I put a lower offer and see how it goes (but then I’m worried they reject the offer, the seller seems to know what’s going on)

The property was assessed for $271,000

Opinions and/or suggestions on the best way to approach this would be appreciated.