Hey BP,
Ok, so I have been working on this wholesale deal since February. The seller is motivated and I was able to put the house under contract. I originally offered $220K, but he was countered with $300K. We eventually met at $247K. The ARV at the time came in at right around $400. The house had section 8 tenants and is a two family. The seller used the bottom portion of the house for himself when he worked in the area, but had his own home. At the time, it needed minimal amount of work(some paint, clean-up, there was a few tiles missing in the bathroom, but he had it). I found a buyer a week later and everything seemed to be going smoothly. The buyer was going to pick it up for $262K. Now it was a matter of waiting for the tenants to vacate the property. Being that it was section 8 tenants, time was not in our favor as she had to find a new location which took a good amount of time, then her new location failed inspection because of safety issues, so her new landlord had to get things added/fixed. Fast-forward to present day, the tenants just left last week. It has been a frustrating time period, but now that we are here, my buyer would like to try for a $40K price reduction because of market condition changing, plus he went to the property a few weeks ago while the tenant was in the process of moving and he said it was filthy. I met with the seller a few days ago, and he has agreed to clean up the house, repaint areas of the house, clean the bathroom and get into tip top shape. I discussed a possible price redux with him, but he seemed adamant about how he can't budge much further because he owes $180 and needs the cash badly for his other house and other bills.
My buyer states that his comps show a house a few blocks away that recently sold for $289K with new bathrooms and new kitchen, but when I asked him for the addy, he said he didn't remember, but that he would try to get it. I was looking at my realquest comps at the same time and mentioned that my comps still put the ARV in the $390K range, and there was even some recent sales in the $400K+ range but I didn't see his $289K that he mentioned. The numbers for the deal still make seem to make sense, and I understand that he would like to try to get a price reduction, but asking $40K, I feel like I might insult the seller and risk losing the deal altogether. The seller did mention that he had a few inquires into the house, and his realtor friend feels he can move it at a close to ARV price, but the seller would rather not gamble with time.
What do you guys and gals think?
