House Hacking FSBO: Negotiation process

[Benjamin Sulka]

Hey BP,

I found a FSBO property in my area that has potential to be a solid house hack deal.

Do you guys have any tips for negotiating with the seller? 

The seller for this property is motivated because he never intended to be a landlord and wants to move to Florida.I want to try to get him to understand all of the expenses that I need to incur as an investor and that my offer price comes down to the number my spreadsheet shoots out basically.

The property is listed for $305,000 and he conceded an additional $15k down to $290k without me even saying anything. There is definitely potential to get it lower but it seems like it is going to have to be way lower after considering the expenses that are going to come with it.The entire property has potential to bring in $3,000 worth of rental income if my rent comps are correct. One unit is updated and the other would need to be updated while we are living in it.

I want to get him to understand if our monthly payment is too high, we don't have the extra cash lying around to fix up the other unit and get it to market rents. Which in turn makes the investment not viable. 

He is looking for $290,000 but realistic offer price with the current interest rate and other expenses is closer to $260,000. 

Should I ask if he has a loan on the property that is assumable? He bought it in 2021 so I bet it's low. I just have no clue how to navigate that. 

Thanks for any insight!!!

-Ben 

[Nicholas L.]

@Benjamin Sulka

I think it's fine to present your analysis, but you can't "convince" anyone of anything.  He either accepts or he doesn't.  If he declines, you thank him for hearing you out, and you move on to the next one.

And on the loan, it's probably not assumable, and I don't recommend that new investors buy deals sub-to.

Do you have a lender lined up? And even if you're not working with an agent, do you have someone advising you?