First Timer - Submitted Highest & Best - How Did I Do?

[David L.]

I've been lurking, and listening to the podcast, for a while now and finally feel like I have something to post about. We are looking to buy-and-hold for passive income, more so than flip for quick returns.

We submitted an offer yesterday on a foreclosure condo in central VA and the seller came back today claiming multiple offers, requesting our highest and best today. The condo's been on and off the market for over a year, and continuously now for 4 months, with the asking price having been dropped $60k over that time.

The numbers:

Current Asking: $110k (just reduced by $10k yesterday)

Our Initial Offer: $90.5k

Annual Rent Less 8% Vacancy: $11.6k ($1,050/mo gross rent)

Taxes: $1,425/yr

Prop Manag. (8%): $1,260/yr

Insurance: $800/yr (?)

HOA: $1,224/yr (exterior maint. only)

Interior Maint. of Unit (5%): $630/yr (ext. under HOA)

Misc. (Sewer/Water, etc.): $700/yr

Mortgage P&I: $4,600/yr

Cash Flow Before T&D:$930/yr

It meets the 1% but not 2% or $100/door. I figured it's not a scorching hot deal, but it is in a good area and is pretty much move-in ready (new carpet and paint already installed), with only some minor touch-ups needed. Non-foreclosure units in the same complex have sold for $160k - $170k within the past 4 - 6 months, which indicated to me that 1) there should be equity coming in the door and 2) this is a really tough area to find units that cashflow.

I'm pretty much sticking to my math for the highest and best response, asking seller to pay for my closing costs and increasing my offer by about the same amount.

My questions: How do the numbers look? Did I offer too little, too much? Would you have handled the best offer differently?

EDIT: If someone can tell this n00b how to turn off the extra carriage return, I'd be happy to fix the formatting above. Thanks!