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Updated over 5 years ago,
Trying to make an off market deal work
The market where I am at is scarce in terms of deals. I've been working with a developer who has a duplex who is interested in selling but is by no means motivated to sell. I'm trying to house hack my way into a decent deal to start out. The facts are this:
- Duplex built in 1980 with detached (2) 1 car garages
- Rent for long-term tenant is currently $825 while rentometer says it averages out to $1015 for the area
- Rent for the recently remodeled (5 years ago) for the short-term tenant is $1000
- Neither tenant utilizes the garage
- Property taxes are $2,797.20 annually
- The owners opinion of value is $285-300k (assessed value at $251,587)
Factoring vacancy at 5% (current area is at .2%), 10% management, no capital improvements included as I'm rolling the management fee with that as I would self-manage for this first go around. The property doesn't really cash flow above $255,000 and at that price is maybe $30 total.
Before I got the owner's opinion of value, I offered $235k and that was too low, he countered with maybe he'd consider $250-280k but didn't want to negotiate against himself. He gave me the opinion of value last week.
Is there room to negotiate on this deal to make it a positive win-win for both parties?
$250k and a $40 cash flow seems slim after everything, but perhaps its a start. Any advice on trying to make this work is appreciated, or is it too far of a stretch.