First property! We’re $10k apart

[Chris Rubin]

Hi! I’m about to jump into the waters with my first investment property. A duplex with really good numbers, however my target acquisition price is $290k (asking was $339k) based on the fact that the listing agent hinted the buyer might sell at that price (“he’d probably let it go for 290-295”) were her exact words. He came down to $315 and now $310 firm and doesn’t seem to want to budge. The property is pretty much turnkey, which is what I’m looking for, (and I understand that I’d pay more for a turnkey property) but is the highest priced property in the area (based on comps) and I don’t want to overpay. That being said, the numbers still work, even at $310k. The seller added a legal basement apartment which turns it into a triplex and renoed the garage which he rents out for extra income. He put a lot of money into it but needs to sell because of an illness in the family. I don’t want to miss out on the opportunity but can’t seem to come to grips with overpaying, even though it’s has value based on the renos. I’m torn. Any advice/help is appreciated! Thanks BP members! Chris

[James Wise]

Originally posted by @Chris Rubin:

Hi! I’m about to jump into the waters with my first investment property. A duplex with really good numbers, however my target acquisition price is $290k (asking was $339k) based on the fact that the listing agent hinted the buyer might sell at that price (“he’d probably let it go for 290-295”) were her exact words.

He came down to $315 and now $310 firm and doesn’t seem to want to budge.

The property is pretty much turnkey, which is what I’m looking for, (and I understand that I’d pay more for a turnkey property) but is the highest priced property in the area (based on comps) and I don’t want to overpay.

That being said, the numbers still work, even at $310k. The seller added a legal basement apartment which turns it into a triplex and renoed the garage which he rents out for extra income. He put a lot of money into it but needs to sell because of an illness in the family.

I don’t want to miss out on the opportunity but can’t seem to come to grips with overpaying, even though it’s has value based on the renos.

I’m torn.

Any advice/help is appreciated!

Thanks BP members!

Chris

 If the deal works at $300k, it works at $310k. That $10k gap is an irrelevant amount of money. That's about $70/mo on your mortgage. You'll be dealing with swings in both directions that are much higher than $70 over your entire investment career.