Vacant Duplex Negotiation Advice

[Nick Reinhardt]

Hi All,

I'm looking for advice on financing options for a vacant duplex, as well as how to talk some sense into the owner.

Here is the background. There is a duplex next door to two other duplexes I own that has been vacant for at least 3 years. The outside of the property is in pretty good condition, I have never been in the property but from pictures and experience with my neighboring units estimate the renovation budget to by about 80K.

I have spoken with the owner every couple months since last summer inquiring on her plans with the property, and to let her know my interest. Her plans as of last summer were to renovate by the fall, and list the property for 500k. Fall has came and went, no work has been completed, the property is still sitting vacant. I just recently reached back out to her to see if her plans have changed, she now is looking for a cash buyer at 375K, or will still plan to renovate if she cannot find a buyer. The home is not worth 500k, the highest comp in the last 6 months was 450k.

Questions

-To put it simply, what is she waiting for? Rent it out, fix it up, sell it, do something....

-Why is she looking for a cash buyer? I would assume do to the condition of the home a conventional lender may not lend on it.

-Ideas on how to approach this? We are quite a ways apart on what the home is worth, how would you work on setting more realistic expectations?

I don't have 375k cash, and wouldn't pay that, but I have a private lender lined up that would fund the acquisition and rehab. To make this work the purchase price would have to be around 265-275k.

My second thought, and my preferred path is do a conventional owner-occupied loan. In which case I would be willing to increase the purchase price to 325ish.

Thoughts?

Thanks in advance.