Offered a package deal but I don't want the whole package????

[Bruce Clark]

My realtor approached me with a package deal of 4 properties with a total of 6 units. 5 of the 6 units are occupied.   These properties have not been listed yet. Realtor says that the seller is out of state and inherited these rentals from his parents. Seller REALLY wants to sell these units as a package. I walked all of the properties with the realtor yesterday. One of the properties is in great shape. It has great long term tenants and honestly I would pay the full asking prices without blinking an eye. Two of the properties are fixer uppers, but I can make them work with a little negotiation on the price. However, the 4th property is a dog. Granted it currently has a tenant that pays rent that is actually above what I would say the property demands. However, it is in a terrible location - on a steep hill with no parking. Further, should the current tenant (a single guy who doesn't mind paneling, worn carpet, old cabinets etc) move out, it would need considerable upgrades. Also, considering the hill and the parking, I think it will be hard to rent regardless.

Generally, if the 4th property was listed individually, I probably would not offer on it (even thought the selling is only asking $19,900). My question is, is it worth buying this property, which may give me a little cash flow but in the long run will definitely not appreciate, in order to get the other properties which are good properties at very good prices. Or should I try to just offer on three of the four and risk losing the properties.

Thanks for any suggestions and/or advise.

[Patrick L.]

This is how you get good deals in real estate, by solving a problem for the seller.   Seller wants to sell as a package so if you want the best deal you should buy as a package.   You can negotiate the price but at the end of the day the seller's goal is to sell all of them and be done with it so that's the one criteria that you should try to meet.    Just because you're buying them all doesn't mean you have to keep them all.  If you aren't interested in the 4th property then sell that one after you buy them.   It should be an easy sell at that price with a tenant already in it. 

I bought a package of 3 properties last year and all I really wanted was one of them and there was one in there that I didn't want at all and that the seller really wanted gone (I'm probably going to have to tear that one down).   The seller wasn't going to sell me the house I wanted unless I took the entire package so I made an offer for the 3 that was only slightly higher than the max I would have paid for the 1 I wanted.