Condo Deal Negotiation Advice: very close to deal

[Jeff Bridges]

I'd appreciate any ideas on how to handle pricing negotiation with the seller based on the below details:

I'm in discussion with another condo owner in my building to buy his 1bd/1br unit. Location is Washington, DC in city near metro station. Unit has been vacant for 13 years since owner moved out, but hasn't been willing to rent or sell the unit for unclear reasons. He's in 60s and retired. Unit condition is very poor and still contains his old furniture and household items in addition to needing a new kitchen, bathroom updates and drywall repair to 3 different rooms from prior leaks from upstairs. the bathroom ceiling is collapsed. Overall scary cosmetic picture, but all reasonably taken care of with a good contractor.

The negotiations are that I offered 80k cash however he is hoping for 89k, which means we're fairly close. He is using the purchase price of my unit from June 2013 of 89k as the basis for his asking. I responded that his unit condition is in significant worse condition than the condition mine was in during purchase. We left off with him providing me keys/access to the unit for the week while I bring in my contractor to identify the true costs, but he still thinks the 89k price is reasonable regardless of the different in unit conditions and additional repairs/ junk removal required. The follow up phone call will be my opportunity to use contractor estimates to support my claims for the level of repairs, but not sure those will have any effect. Mine took 17k in repairs. His will likely be 20k or more.

This is going to be a buy and hold rental, and I'm comfortable with the cashflow potential, however just looking at techniques on how to help him understand that a) his unit repairs will cost significantly more than mine which is why I was able to pay 89k for mine and cannot do the same for his and b) the alternative option for him to fix and sell will not be worthwhile. He expressed that he would fix and sell if he didn't sell it to me but might not know the true cost of such repairs and the value add for him paying retail to get the below ARV.

ARV is $105K. Analysis of the Deal quality is not as important as I know it doesn't meet the 70% ARV-repairs initial guidance, but nothing in DC does, hence my current offer.

Appreciate any feedback in advance!

[Andres Piedra]

You're right about structuring the deals in DC significantly more different than elsewhere. I'm a Realtor up here too in the DC area. If you send me the address in a PM, I'll do a ARV report for you and you can show it to the owner. He sounds kinda interesting, and possibly not in a good way. I deal with a lot of delusional folks in real estate and I find getting away from them to be paramount. I would not want this guy owner financing anything.