First-Timer with Motivated Seller on the Hook, I think???

[Daren H.]

Hello fellow BPers! I had an out state property owner respond to my yellow post card marketing. He owns a duplex (2 bed, 1 bath units) in the DFW area that he wants to sell. He lives three states away. He purchased the property in 2005 when he lived in Texas. I had never dealt directly with a truly motivated seller before but this guy sounds motivated to me based on what I have read in previous forum posts. All other calls I have received so far have been tire kickers or not in my purchase profile. I am looking to buy and hold the property if a deal can be reached at the right price/terms. Let me know what you think about this seller's motivation based on the info below. Funny thing is, I am nervous as heck that he might be a motivated seller!!!

The owner has been pretty open with information. He said he purchased the duplex for $78K in 2005 and currently owes $50K financed. Each unit is leased and rents for $550 a month (he hasn't raised rent since 2005 as confirmed by a tenant and the PM. I also verified on my own that three similar duplexes on the same street rent for $600 - $650 a unit). According to the owner, he wants to sell because he doesn't make much money off the units and its not worth the headache with him being so far away. The property is being managed by the seller's brother-in-law (a retired carpenter) who charges $75 a unit for management plus additional cost for maintenance issues. The properties appear to be in fair condition from outside and inside visual observation but cosmetic work is needed in my opinion to maximize rents (more formal due diligence is required also).

The owner acknowledged the house was up to date on taxes and mortgage payments. I asked him if he already had a price in mind and he stumbled to answer the question like he hadn't given it much thought. He eventually said it would be nice to get what he paid for it in 2005. Based on research I had already done, I tempered his expectations about getting an offer close to what he paid in 2005 and he didn't dispute. I followed up and asked him was there a minimum amount of profit he was trying to make off of the sale. Again, he approached the question as if he hadn't given it much thought. From his words, I felt he seemed more concerned about not having to come out of his pocket to complete the sale. He said he wants to sell right now if I can make an offer that is acceptable. He arranged with his PM to let me walk through and around the property and I can go back if needed. The PM was very forthcoming as well (I think he was auditioning just in case of a sale but I have my own PM). Again, from visual observation, the property appeared to be in fair order but would need some cosmetic work (fencing, paint, flooring, etc.) to maximize rents. I would have a formal inspection done if I get the property under contract.

Right now, the seller is waiting on me to make him an offer which I am planning to make. Your thoughts and comments about this seller are welcome.