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Updated about 1 month ago on . Most recent reply

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Quinzel Waiters
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Price Negotiations on distressed property

Quinzel Waiters
Posted

Hello all I'm new to the Real estate space but I'm working on getting my first off market deal

Currently I'm looking at a heavily distressed property that's priced too high. It's a complete gut job. Needs new everything floors, kitchen, bathroom, paint, roof, landscaping and also has termites and a tentant that's not currently paying rent, for a 1000 sqft property they want 160,000 for it, but my comps say for a rehabed house in similar sqft property in that zip code would sell at 220,000k and I would say it needs atleast 65,000 to 75,000k in repairs so my offer price was at 100,000 to 110,000 and the buyer will not entertain my offer

I would like to offer more but if there are any surprises I'd like to be prepared for those cost during the rehab process. Should I move on or does anybody have any strategies on how to negotiate? Also they don't want to do any creative financing.

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Chris Seveney
  • Investor
  • Virginia
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Chris Seveney
  • Investor
  • Virginia
ModeratorReplied
Quote from @Quinzel Waiters:

Hello all I'm new to the Real estate space but I'm working on getting my first off market deal

Currently I'm looking at a heavily distressed property that's priced too high. It's a complete gut job. Needs new everything floors, kitchen, bathroom, paint, roof, landscaping and also has termites and a tentant that's not currently paying rent, for a 1000 sqft property they want 160,000 for it, but my comps say for a rehabed house in similar sqft property in that zip code would sell at 220,000k and I would say it needs atleast 65,000 to 75,000k in repairs so my offer price was at 100,000 to 110,000 and the buyer will not entertain my offer

I would like to offer more but if there are any surprises I'd like to be prepared for those cost during the rehab process. Should I move on or does anybody have any strategies on how to negotiate? Also they don't want to do any creative financing.


 Move on. Even at $110k I think you are pushing it as if you were to get a loan for $150k say your holding costs for that loan and closing costs could be $20k+, then you have selling costs of say 8% which is another $16k. So if all stars aligned and you were in it for $185k + 36k you are at $221k - just lost $1000.

If it needs $75k in work I would probably be around $85-90k for that home.

  • Chris Seveney
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