Quick! I got an offer accepted now what?

[Elliot Vann]

So me and a partner have been looking at deals for a few months and we finally got a mortgage pre approval.

We put our first offer on a property in Easton, PA...and just like that after a counter we are good to go!

It is a duplex in the heart of the south side of Easton

Can someone please check my numbers and make sure I’m not missing something.

$125k purchase price

75% LTV

4% interest rate and 4% closing costs

Taxes is about $3,300 and insurance $800

The only other cost is water and sewer at $600-$700.

One unit rents at $800 and one at $950

The way I see it with 30% for vacancy, management, repairs, and capex it is an 8% cap which cash flows $200 a unit and has a 12% CoC.

It’s an older building and isn’t pretty but both units are occupied and in the contract we wrote that the seller has to show their proof of payments.

Besides the numbers I’m also nervous that the seller just bought it a year ago at $87k and was quick to counter our offer below his listing price.

Thoughts or comments????

Much appreciated!

[Joe Splitrock]

They just bought it a year ago... It looks like someone is dumping a turd on you. What do other recent comparable sales look like? Did they buy it for $87K off the MLS or a private deal? If it is a private deal, they may just be dumping for quick profit, which may have been their original plan. All I am going to say is landlords generally don't sell trouble free properties after owning them only a year.