Earlier this week, I submitted an offer on one of the MF's I talked about in my last post. Well, the agent sent me an email this morning saying the Seller's countered my offer for $2,000 MORE than the list price! The reason the Seller's gave for this, she said, was because they upgraded the electrical mains to 200 amps. Then why list it for '$nnnnnn' if you plan to actually try to get '$nnnnnn + $2,000'? My thinking is that either they never thought to change the listing, or they are being sneaky. I think this property has been listed a while (I know it's been at least two months), so maybe they smell an opportunity. My original offer was for '$nnnnnn - $10k'. After receiving this email, I emailed the agent back and countered their offer with a new one of '$nnnnnn - $6,000'. We'll see how well that goes over.
Update: The owner isn't budging from their "new" price. I sent a revised offer to her and she said the owners are staying put at '$nnnnnn + $2,000'. She said they just finished renovating the last unit and installing the last 200Amp main. She said they totally renovated the whole property, and that's why they upped the price by $2k. I haven't emailed her back with a response yet. The numbers still work for their new price, so it isn't like it's a killer. I'm just a little worried now because I'm not 100% sure about the renovations, etc. - especially the nagging question, "Is there more stuff that will be needed?" The agent still hasn't given me a run-down of all the repairs the owners have made, so I'm in the dark on what I'm facing. My gut feel right now is to submit an offer for their new price and have them pay for both a property inspection AND a pest inspection. Plus, have a contingency that I can back out if either do not meet MY standards (or have them fix the problems). Still contemplating.
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You don't know if there will be any additional repairs needed from what you've heard. It may very well be in tip-top condition now. But, then, you don't want to buy "as-is" with no contingency for repairs if you have no one there who can tell you one way or the other prior to entering contract. I would have suggested you get a buyer's agent for yourself prior to asking about the property. But, no matter.
When you make your next offer, especially if you go for full price, be sure to put a contingency in there for release of earnest money if the property does not meet your standards after the inspection report comes back. ALSO, make sure you put a dollar amount that they'll have to put toward repairs if any need to be made--like $1000 or $2000, for instance. That way, if you do like the property and the inspection doesn't reveal anything horrible enough to walk away, you're still somewhat covered for deferred maintenance that comes to light.
Don't be afraid to walk away from this one. It sounds like they may be experienced investors who think they have a live one on the hook and would like to reel you in.
You never know. If you get close to an agreement and walk away, they may come after you and say, "OK, OK, we'll take your last offer!"
The inspections and contingencies should keep yah well covered.
Patrick,
http://www.flippingpad.com
To Steve and other active RE investors. We just launched our site and are hoping to find some experienced investors to help moderate our budding community. Drop us a line through our site if your interested. I would have emailed yah directly Steve, but we couldn't locate your contact info on the blog.
Thanks Trisha. That all sounds like real good advice. I'm still holding out on getting a response back for several different reasons. I may even wait for the weekend when I have more time to think about the whole thing before formulating a decision.
What's funny is I got a packet from the agent I'm dealing with on the other MF yesterday. She said she was going to send me something several weeks ago, and I just now got it. One of the tenants got evicted in that place recently, and a couple of other issues are starting to sour that deal as well.
Any updates?
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