Offering and negotiating on a property in need of reparis

[Mitch Horwart]

Here goes my first BP post!

I just looked at a property today that was purchased in June 2017 at 140k and the owner had some bad tenants that trashed the place. He now wants to get rid of it and is asking 139k. The house needs new carpet and paint throughout. He wants to sell it "as-is", but is willing to negotiate more on price after the inspection. I do not have the capital to fund the repairs if I were to purchase, so would it be better to offer low based on the repairs? Go in close to asking and try to negotiate more after inspection or get him to cover the repairs out of pocket? 

Also I am planning to live in the house for 6-12 months. Any ideas are appreciated! Thanks!

[Brian Adzadi]

@Mitch Horwart

Don't let the seller do the repairs. They are incentivized to do little as possible, so as to keep more in their pockets. Any repairs that needs to be done, you do it yourself or hire it out.

Personally, I would offer low (not too low to a point where its almost insulting ,135K sounds like a good start, he is motivated so play on that) based on the fact that its being sold "as-is" alone. Go up to a max of 138K during the negotiation process.  

Have the inspection done and whatever the amount of work needs to be done on the property, renegotiate to a new price that compensates you for the repair. If the inspection says you will need to do 3K worth of work, reduce the purchase price by 3K.

If he refuses to reduce the purchase price after negotiations then ask for the seller to pay for half or the full closing cost. (The closing cost will be out of pocket money that you get to keep in your pocket if he pays, and you can use that to help with repairs)

If you can have a comfortably low enough price and have the seller pay for closing, you are golden.