Possible first deal ...

[Donovan H.]

I'm currently looking at a 2100 sq ft duplex within walking distance to the local university. It's a short sale listed at $45k. It's an older building (1920's) and needs some work (est. $5k in immediate fixes, another $5k in fixes that can wait). It's currently rented for $900 per unit, occupants pay all utilities, and property taxes run $2k/yr. During an initial walkthrough, the occupants were available and expressed interest in renewing the lease. Tax assessment was $35k in 2010. Listed (but pulled) at sheriff's auction with an valuation of $65k last month. The area is pretty typical college town. I fully expect higher turnover costs because of this. My plan is to buy and hold. This is the "crown jewel" duplex in the area. Comps run anywhere from $14 to $20 per sq ft. I offered $32k, but it was not accepted. Highest and best was requested.

What should my next offer be? Should I even make a second offer? The income potential is intriguing.