Possible Opportunity in neighborhood

[Warren Howell]

My wife and I and considering purchasing a town home right behind us and looking for advice. The current situation: We've lived in these units since New in 2001. The unit behind us was owned by an eldery lady that passed away about 6 years ago leaving it to her Family. The family moved their son in (grandson to the original elderly owner) that has been living there since. This Individual has not had a steady job, can't find work, (we think he's just lazy) and the parents have been fed up with the situation and want to sell the unit. (Grandson will either move back in with the parents, or a possible job in Alaska!!!). Anyways, they came to us first, because my mother-in-law showed interest during a community garage sale while visiting with the parents. So they thought they would offer it to my mother-in-law. (My MIL talks alot, but nothing happens!!) So, we would like to put a solid offer in on this unit in hopes of getting it well below the value. At least 50k. We would rent our place, which we were planning on doing, and moving right across the street into this place, fix it up and eventually sell or rent as a second rental.

My thought is, we would not only save them the agent fees of 6%, the capital gains they would need to pay on this unit would be another powerful way to bring the price down. Since they would have to pay that anyways, they could sell it for less and be a wash.

As I understand, and this is not knowing exactly the situation how they obtained the home, I am guessing it was left to them through the estate. So the value they would pay the capital taxes on would be as of the date of transfer.

Numbers: I estimating the value is worth $390k if they decided to sell. It does need some work, as the grandson is not a clean orderly person. They don't even want us to see it until they have time to clean it up. But living in the same but different layout town home, we know what it might need for rehab. We also know that it was probably worth about $280k when it transferred through the estate.

So based on their income for capital gains, and I'm pretty sure the Father makes 6 figures, and the saving of the agent fees, roughly $23k if sold at $390k. We are thinking of a $340k offer with no inspection needed and no agent.

I would love to hear thoughts on this, anything we might be missing, or advice on making a solid offer.

Thanks in advance,

Warren n Brigette