Multi Use Deal Analysis

[Jonathan Landry]

Hello BP,

First deal that I am bringing here for analysis.  All feedback appreciated.

BP BUY & HOLD ANALYSIS

We found an off market property in a secondary market that is starting to pick up with spill over from a red hot market.  The property is (2) parcels with (2) structures on the larger of the two. The main residence (2500 SF) is habitable but needs a full kitchen/bath/wiring/plumbing remodel in <5 years.  The second detached structure is 720 square feet on separate meters.  Full renovation needed.

House Hacking Opportunity

The property sits on a busy road across from a school.  It is zoned for multi unit residential.  The combined property amounts to 2.45 acres with city water and sewer.

We have a 2 phase plan with multiple exit strategies.  

Phase 1: Close the deal, renovate the detached suite and rent by spring time.  Sell our current residence, move to the main home and slowly remodel over a few years.  

Phase 2: Subdivide and sell or build specs on the remaining property 

Our main concern is that the seller is asking full retail price based on anticipated appreciation.  Two main questions:

1. How does the deal look?
2. Tips and suggestions for making an offer that is <60% of the initial asking price?

Cheers