Negotiating deal on first Duplex

[Bryan Stell]

Hello all,

My fathers good friend and my real estate mentor is "retiring" to his newly built home in Florida. He wants some cash to play around in Florida real estate and most of it is tied up building his new home. He's had a nice duplex in an "A" neighborhood listed on the MLS for 178 days. It is about to expire and he hasn't gotten an offer of which he wants to accept. The Duplex is paid off and rents for 1400/1600 and 115 for the garage. He is not interested in seller financing as he wants 395,000 for the duplex now. I've seen inside and it's nice. It's also rented with 1 long term tenant and her friend. The guy hasn't done evictions in a LONG while.

My question to the community is how can I help my mentor get what he wants ( a reasonable amount of cash for the property, say 375k) and also negotiate strong terms in my favor. Once it is off MLS, what bargaining chips does this give me? He is not interested in seller financing as I already asked him. Also, since it's paid off he is making over 2k/month on this house as the taxes and maintanence aren't too bad. Could I have some ideas for creative financing/negotiating here. He likes me, but won't just give me thousands of dollars for essentially free...

[Andrew Syrios]

This looks pretty tight to me. You have $3115/month in rent, at $375K that's about a 0.8% rent/cost, which isn't very good. For me, it's just hard to make things cash flow well at that price point. Furthermore, if it was on the market for six months and didn't sell at $395K, at most it's probably worth about $375K. And I wouldn't recommend buying a deal without equity unless it came with great terms, which it doesn't sound like he's willing to offer.

The main advantage you have now in negotiating is 1) He wouldn't have to pay a commission, so you can use that to argue down the price and 2) He may be a little motivated after all the time it didn't sell. But personally, I think you would have to come down quite a bit to make this offer make sense.