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Updated almost 9 years ago on . Most recent reply
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Advice on offers
Hello All!
Im working on my first deal as an investor. I'm in the Fresno/Clovis California Market so you know it can be rough. We are using the VA loan and have a cap of $417K. We found a multifamily in a good part of town and the listing price is around $500K. Running the numbers at the asking price makes this deal not so much of a deal. So I ran the numbers from my limit to the asking price and have found the a sale price of $427K earns us approx. $246 cash flow & 13% CoC ROI. For every $10K I increase the purchase price I lose a few % on the CoC ROI and around -$40 cash flow. There are not many comps to work off in the area but the most recent (Last month) a similar property sold for $450K. So I understand I haven't given all the specifics but all that to say, my question is....
Is it alright to offer a low ball figure? Am I going to tarnish my name already if I do so? Or should I even care/worry? Any suggestions would be appreciated. Also I have really thick skin, so any criticism will not hurt my feelings its business.
Thanks in advance!
Most Popular Reply
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You won't tarnish your name making a low offer especially if it has been listed for a while. If it is a new listing I wouldn't even both with that offer till it has been for sale for at least a month. The better question is why would you want to buy a $417K property that only cash flows $246/month? Are your numbers correct? Even at $417K I don't see this as a deal. I guess you are dealing with CA real estate but I might keep looking for a different property or properties.