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Hi all,

After my mother and my step father checked out the location, it turns out the property is in fairly good condition...but it's the best property on an average block.

I want to thank everyone for responding. I can't tell you how much I value your input. I believe I could have made a huge financial blunder on this one.

It's just so frustrating to live in California...although I believe the market is getting softer. The California topic could be a forum by itself.

Hi everyone,

Just an update.... I checked the rent by talking with a couple property managers and the rent is in line with the market for that area. My realtor is comfortable making an offer of 360k net with seller concessions. He says he doesn't think we can close with this price.

He did mention one thing which I found odd...

The generally accepted protocol in Atlanta, unlike other parts of the country, is that an offer of less than 90% of asking price is not a "bona fide" offer. I moved here from Colorado 17 years ago and it took me a long time to get used to the concept...and in the mean time, I had buyers who lost properties they wanted to buy, because they started out too low and the seller and especially the seller's agent were offended and worked to assure that the "offensive" buyer did not "get" the property. A lot of it has to do with the listing agent thinking that the buyer's agent is telling his seller that he priced the property too high. It's very strange, but very true...a "Southern thang", I guess.

I have not seen the property. My mother and her husband will check the property out tomorrow.

(I'm taking everyone's advice and I'm learning against purchasing the property)

I just did as you suggested and the one property manager I did like charged like 10% with a $200 fee for finding a tenant.

I'm still waiting for the rest to call back.

With 10% property management fee...would it be a good one to get my feet wet?

Hi, I'm in California and the property is located in Georgia. (My mom lives in Georgia so I have someone that help out if need be. I plan on using a property manager.

Here's the scenario. The deal I have is an average deal. Not a great one unless I bid 360k...but I doubt the buyer will accept it...

This is my first REI investment and it's out of state so I wanted a class A or B property which is why the deal is only average....

The property is a Quadplex. 2 units 2/1 and the other two are 3 1/1. Tenants are signed till 2008. Good area with growing population.

I'm assuming 10% vacancy rate, 6% property management. The cap rate I think is 6.5% and Cash on Cash is only 3%. New roof and gutter guard in 2006. Newly painted in 2006.

Purchase Price $400,000.00
Down payment $80,000.00
Mortgage at 6%.
$1918.00 Monthly debt payment
Gross Rental income
$37,020.00
10% vacancy ($3,702.00)
Tenants pay utilities
Tax $3600
Insurance $1500
I'm assuming 6% property management. I figure my cash flow would be $250 per month.

What do you think I should offer to make this a more attractive deal?
I mean I know he's asking for 400k but what would be a reasonable counter if at all? Cover all my closing costs? Paying more points?

Should I go ahead? Or wait?

Paralysis by analysis or just pass for now?

Please help.

Thanks

Hi, I'm in California and the property is located in Georgia. (My mom lives in Georgia so I have someone that help out if need be. I plan on using a property manager.

Here's the scenario. The deal I have is an average deal. Not a great one unless I bid 360k...but I doubt the buyer will accept it... I just want to get my feet wet but not make a tragic mistake.

This is my first REI investment and it's out of state so I wanted a class A or B property which is why the deal is only average....

The property is a Quadplex. 2 units 2/1 and the other two are 3 1/1. Tenants are signed till 2008. Good area with growing population.

I'm assuming 10% vacancy rate, 6% property management. The cap rate I think is 6.5% and Cash on Cash is only 3%. New roof and gutter guard in 2006. Newly painted in 2006.

Purchase Price $400,000.00
Down payment $80,000.00
Mortgage at 6%.
$1918.00 Monthly debt payment
Gross Rental income
$37,020.00
10% vacancy ($3,702.00)
Tenants pay utilities
Tax $3600
Insurance $1500
I'm assuming 6% property management. I figure my cash flow would be $250 per month.

What do you think I should offer to make this a more attractive deal?
I mean I know he's asking for 400k but what would be a reasonable counter? Cover all my closing costs? Paying more points?

Should I go ahead? Or wait? I have 200k and a steady job.

Paralysis by analysis or just pass for now?