All Forum Posts by: Benjamin Sulka

 All great ideas, Peter. Thanks for commenting

 Really appreciate this response! This is a great way to look at it 

 No, absolutely not. It just fits our buy box and meets our criteria for a house hack turned long term buy and hold at that purchase price.

 This makes sense! Looking at some comps now to get an idea of what a fair market value would be after some of these repairs. Seems like low $200s is accurate based on square footage and amenities.

Just trying to be cognizant of the sellers expenses for having owned the home for a short period of time. They bought the home for $155k and put probably $10,000 of work into it plus the capital gains they'd have to pay and closing costs. 

Based on the rental numbers, we could pay up to $220,000 for the property to hit the 1% rule. My offer is likely going to be in the $195-205 range. 

Want it to be attractive enough for them to consider but also under market enough to make it a good deal. 

 Great thought. There aren't many multifamilies in the area and the prices vary drastically within a 1 mile radius for properties with a similar square footage. 

I would say low $200s is fairly accurate. Which is right around where our offer price would be. 

 John,

Thanks for your response. This is the approach that I was leaning towards. 

Want to make the offer attractive enough for them that they'll consider but also low enough so that we get a good deal. 

All the best,

Ben

Hey BP,

Seeking some help on negotiating/offering a price to an off-market seller.

I cold-called an off-market opportunity today and the seller expressed interest in selling if the price was right. This would be a house hack.

The property was purchased in April of last year for $155,000. The seller said they re-did flooring, repainted the interior and added some other fixtures in the past year since they've owned it. I have no experience estimating rehab costs and I know costs have drastically changed since books like J Scott's were released. 

The property is a 3/2 duplex. One unit is a 1/1 rented for $900 and the other is a 2/1 that could rent for $1,200-1,300. We could offer $210,000 to make it a 1% deal, but I understand that the seller paid for the rehab, would have to pay capital gains tax, and closing costs.

Based on the info provided (potential rent roll, the fact that it would be a house hack, and the appreciation potential), what do you think a reasonable offer price is to get them to sell a property they recently bought and put money into?  The property is in a city/town that is appreciating quickly, is in an excellent school district, and is going through continuous development.

How would you go about price anchoring and negotiating the deal? The seller was adamant about me throwing out a price first.

Grateful for any advice. This would be my first real estate transaction. 

-Ben, aspiring multifamily househacker

Appreciate the insight, man! 

I think going the FHA 203(k) route could definitely be an option for us.

The plan is to live in the worse off unit regardless of what property we end up buying. 

Ant

I love this update!! Glad that your previous tenants left the place in great shape for you. 

Biggest challenge for me has been finding a property that fits my narrow criteria. Had one that we found off-market but things fell through during the inspection (electrical and plumbing issues that we didn't have the capital to pay for and the seller wouldn't budge on). 

Lots of old properties where I'm at, so it isn't unusual to expect $10k+ of capex out of the gate for water heaters, putting in central air possibly, and other old property issues. It has been hard finding a place that
1) Doesn't get bid up by cash buyers that we can't compete with

2) Doesn't have 10's of thousands of capex out the gate

3) Is in an area that I'd grade as C+ or better. Really trying to find something where I'd feel comfortable with the fiance walking the dog at night or just being by herself. 

Love to see you crushing it in your journey. Let's hop on a call soon & touch base!

-Ben

Like Randy said, look into house hacking! You do still have to have verifiable income history to get a loan, but it's more attainable for someone your age because of the low money down.

I'm in the process of buying my first house hack right now at 23 and the lenders that I've worked with do take the income history seriously. I've seen lenders exempt years spent in college as "work history" but the borrower would still need to have sufficient funds/reserves and a solid credit score.