Determining Initial Offer Price!

[Travis Washington]

Greetings my fellow BP colleagues,

I currently have a place that I am interested in that is listed at $52K and is turnkey (recently renovated) with rent going for $800. At that asking price and rent the CAP rate is 18%. However, one of my criteria that I seek to achieve is 20% CAP which would put an offer price from me at $46K. Additional note, I am an out of state investor. Now, I know the individual seller the property and do not want to disrespect him or have him feel disrespected with my offer. However, I do want to ensure I have the best deal. Another note is the seller is also an investor and is currently trying to sell is 30+ properties he owns and move into retirement and a few other projects in HI.

Now you all, as experienced investor, would all advice to push the $46K offer?…Or possibly offer lower or closer to the asking price?

Key Notes:

Asking Price: $52K
-Turnkey
Rent: $800/month
Loan Info
-15% down (i.e. $6.9K if price is $46K, $7.8K at $52K)
-30 years fixed @ 5%