Need advise on this deal (estate/short)...

[Christopher Henning]

I am hoping you guys can give me some advice on this deal I am working on. It is my first deal so I am a bit skeptical on things and want to make sure that I am doing the right thing.

I found a 3/3 Double that will gross about $1100/m in rent. The place is and estate that was listed at $40k. I put in an offer of $35k. The listing agent comes back and say that there is another offer pending that I need to put in my best and final offer. I come back and offer $40k + the appliances that are in the apartments and contingent on home inspection since the seller cannot provide any disclosure to me since it is an estate.

The listing agent then comes back to me and says that the other offer was for $50k but they withdrew their offer and he feels that if I could come up with $45k then we could get the deal done otherwise we would have to get bank approval of a short sale and seeing that it is an estate, they aren't sure that the bank will do a short sale.

Through my research, I have found that this house only assessed at $46k last year and it has been on the market 127 days. I found it kind of fishy that if this would have to be a short sale if it doesn't sell at $45k. If the max value of the home is even $50k which is higher than the assessment it would still be over 80% LTV and banks don't lend over 80% LTV around here. Also why would he list the house at $40k if he knew that he needed more out of it to break even? This house is in Buffalo, NY and homes are not selling for more than they are listed for.

My agent said that if I decided to keep my bid at $40k then it would have to go to the banks lawyers for short sale. Normally this takes at least 90 days to close a normal short sale but seeing that this is an estate it could be tied up even longer. This would leave me past the new year before it would even close. Now we planned on buying at least 2 homes per year and this would definitely set us behind in our plans which doesn't thrill me.

I know that there are other deals that I could probably close way before this one on other homes that will bring around the same rents.

I would like to get your opinion on what I should do I this. Should I keep persuing this property at $40k and have it tied up in litigation for who knows how long before it closes. Or should I just move on and find another deal? I am leaning towards moving on.

Any help you can give would be greatly appreciated.

Thanks!

Chris