It depends on how you view it.I agree with J Scott and I am sure others will disagree with me and him as well.I also believe these costs wouldn't be an issue if the are accounted for before the purchase.In other words run the worst case scenario and if that doesn't happen then you are better off than you thought.It also depends on the potential "book of business" you will be getting from the relationship.If this is a big seller who has a large portfolio of properties selling in the millions of dollars than that is different from an investor selling an occasional 50,000 flip.If I am a broker/agent playing in that range I need to make every little cent and as a broker/agent someone cutting me on every deal will be a turn off to do future business with them.I just think you will burn more bridges than you build.For everyone's information the REO companies are some of the nastiest unethical companies out there and treat brokers/agents like slaves.Everything from a 2% co-op to paying off the net to belonging to 10 organizations charging hundreds of dollars each a year to paying for computer platforms,etc.I could go on forever but many seasoned REO brokers have left that side of the business.For the investor the investment makes sense based on the return but not for the broker/agent.

Listings as of 01/19/07 at 5:54am Page 1 Sold 05/20/06 CD 01/11/07 DOM 51 SO HUFF08 CASH SP$ 2,000 M994474p E01CI 548 York St Unit# Subu City LP$ 9,900 City/Village Cincinnati Cnty Hamilton State OH Zip 45214 OP$ 9,900 Subd Twp Ezzard Charles to Linn to east on York.

I'd be interested in what the OP's take on the "add on costs" as well...For the type of project you are entertaining, the 221d program is really in a world of its own (as it pertains to borrower benefits)...There loan programs that offer less "fuss", but loan to value allowances and rates will be of no comparison.Regards,Scott Miller

@Winston ParksRevenue (average occupancy * average room rate)Operating Expense (utilities + payroll + maintenance + franchise fees + supplies and linens, etc)Rev - OpExp = Operating ProfitSo long as Op Profit > (debt service + desired ROI)  it should be worth evaluating.If you base all of this on the current numbers and then are able to improve room rates and/or occupancy rates you have a good investment. 

I lived in a co-op and many were evicted for one reason or another.

@David Krulac, I am sure you can negotiate down, especially with volume, but I wanted to give OP an idea of the "retail" rates, particularly since it seems like his first unit in that market.

To think that the agent did no research as to status/condition of title should not surprise experienced probate investors.Interesting how many people were drawn to this thread only to see that the OP was relying on the knowledge of the real estate agent (sigh).  

Put those numbers up here and I'll tell you what I would pay for the place.TaxesSewer and WaterTrashHeat/UtilitiesHOACap Ex and Ops (this is a tough one on this deal.  

@Chris Mason the reason the spouse was left off is because of the pass through treatment of LLCs/sole proprietorships and the combination of being married.One way to get the treatment the OP is seeking is to set up separate C-Corps that provide services to each other.

(But as you can see, the OP now seems to -agree- there may not be one - for THEIR situation)...