A Potential "investor's Issue" With The Boss!
My husband and I own a 2/2 house that we'd like to rent out. We would then move to a bigger house. Now, here's the situation.
I know of a house that's vacant. Husband is now deceased, wife is in rest home. Pretty sure the house is paid for. Comps for this house is $300-$310k. (Husband and I only qualify for $300k max)
This house is in need of repair, plumbing, electrical, and other updates.
How do you come to a decent offer price?
Do you get a figure of what it would cost to fix this house up, and then deduct that amount from the house's appraisal?
Please let me know -- I want to approach this right. The person who has title to the house now is the son of the deceased -- who happens to be my boss!!
[addsig]
have you contacted owner and are they interested in selling?
have you estimated repair price?
ARV x 70% - repairs = max price you'll pay - start negotiations below this
for instance, if repairs $30k and ARV is $300k as you've suggested, then
$300k x 70% is $210k - $30k = $180k
offer $150k and go up from there!
of course, these are investor calculations. you might be willing to go considerably higher if you are going to live there!
remember, in negotiation, he who speaks first loses. ask current owner what is the lowest offer they would take and see how they respond.
is the property currently free and clear for the existing owner? if not perhaps consider getting property subject to any existing financing and then paying owner for their equity.
...of course, all this doesn't factor in your boss being on title! don't know what to tell you about that one! <IMG SRC="images/forum/smilies/icon_cool.gif">
let us know how it goes. good luck to you!
allcash
[ Edited by AllCash4Homes on Date 03/10/2004 ]
The owner of the property is my boss!
He has a house and is not interested in being a landlord. I'm pretty sure the property is free and clear....
Thanks for the suggestion on asking how low will he sell it for -- I will take that approach.
I've worked for him for 18 years, we have a father-daughter type relationship and want to handle it with integrity...
thx
Given the kind of relationship you have had with the son who now has title, I'm wondering if there would be a benefit to suggest that an appraisal be done of the property in its "as is where is" condition. (Perhaps an appraisal has already been done for purposes of valuing estate assets.) The situation is delicate--I appreciate that. Persuading the son to have the appraisal done may be one way to get a value "arm's length". You don't have to accept the bottom line number but it could be a starting point for discussions with the son as to what the property is worth in its current condition.
nancy,
thank you so much. i so appreciate your feedback. you all are the greatest!!!!
ck
great idea, nancy!
mark1028, keep us up to date on how this goes!
allcash
Let me give you a word of advice do not ask your boss to finance this house. If something where to happen and you could not make payments. It could put a strain on the good relationship you have now. Have the owner give you his lowest price and then start negotiating.