Negotiation help or suggestions

[John Christodoulakis]

Hi everyone, I am in a little bit of a creative block for lack of a better word. I am in the process of negotiating on a investment building that needs some work and the owner knows it. The problem is that he is pretty stubborn in his price and thinks its priced well with the renovations in mind. Normally in my area I have been buying units for around 50k-65k. This deal is about 54/55k a unit. It’s not awful but I am worried because it needs a lot of work to be done. The entire exterior of the building needs work to be done to it in siding, soffit, facia, gutters, windows, and roof. The building is about 5,000sq ft so I’m guessing work for that will be around 70-90k. The interior flooring is not even at all as well. It has to be torn up to see what problems are inside of there. 

I have thought about telling the owner that we can bring a contractor in or an inspector to look at all the issues and figure out a price on what it would cost to get done. Is that stupid or even worth my time? Any suggestions or ideas are appreciated! 

[Don Konipol]

Quote from @John Christodoulakis:

Hi everyone, I am in a little bit of a creative block for lack of a better word. I am in the process of negotiating on a investment building that needs some work and the owner knows it. The problem is that he is pretty stubborn in his price and thinks its priced well with the renovations in mind. Normally in my area I have been buying units for around 50k-65k. This deal is about 54/55k a unit. It’s not awful but I am worried because it needs a lot of work to be done. The entire exterior of the building needs work to be done to it in siding, soffit, facia, gutters, windows, and roof. The building is about 5,000sq ft so I’m guessing work for that will be around 70-90k. The interior flooring is not even at all as well. It has to be torn up to see what problems are inside of there. 

I have thought about telling the owner that we can bring a contractor in or an inspector to look at all the issues and figure out a price on what it would cost to get done. Is that stupid or even worth my time? Any suggestions or ideas are appreciated! 

There are millions of deals out there.  Tell him to keep your number, and when he hasn’t sold it in 12 months give you a call to see if you’re still interested.  Sometimes (often) it time better spent prospecting for realistic sellers than trying to get a seller not ready to sell to sell at market price. Look at it this way.  You want to buy a stock current price range 25-25 1/2.  Your neighbor owns some of that issue and tells you he”ll sell at 40.  Do you waste time talking with him or do you just tell your broker to buy at the market (25 1/2)?