Looking To Purchase...Need Advice On An Offer??

Hello all..
I am looking at a Triplex over the weekend that is fully rented. It is a FSBO and I am wondering what should I offer? He is asking $90,000, but I have drove by it and it looks like it needs cosmetic work done to it. It is in a nice area though...seems to be the only unkept one on the block (there always seems to be one!). Anyway....what should I use to determine an offer price?

Thanks....and sorry I dont have anymore detail to give, because that is all I know right now.

Chris G

P.S. - Also, landlord is currently paying utilities. grin

Comments(7)

  • InActive_Account29th April, 2004

    Do you have any comps? Take a look at the tax records to see what nearby triplexes/duplexes are selling for, and do a drive-by to see what the competition looks like. Also, did the owner disclose the amount of the rents, and the lease term (i.e., how much longer can you expect 100% occupancy)? You can use those numbers to calculate cash flow...

    Man, I wish I lived somewhere else - you can barely buy a crack house down here for $90k! smile[ Edited by mandiland on Date 04/29/2004 ]

  • sharpREI_PA29th April, 2004

    HAHA...Thanks for your reply....Yeah...he said the rents are $500,425 and 450. Like I said , I am not sure which is rented out at what prices.
    Where is a good place for me to check out comps online for a property like this?

    Thanks again

    Chris G

  • tinman175529th April, 2004

    Chris
    Can't do it in Lawrence County on line>

    Lori

    If the property is listed, ask your RA for comps. Is the property Comercial or Residential?

    _________________
    real estate investor since 1988. I like to find creative solutions for my real estate headaches before they become problems. Most importantly, MOVEMENT DOES NOT EQUAL PRODUCTIVITY[ Edited by tinman1755 on Date 04/29/2004 ]

  • sharpREI_PA30th April, 2004

    Thanks for your response Tinman...
    The property is residential.

    Lawrence County since to be a terrible place to find any values on property...even from the county website!! I wish they had one like Allegheny County.

    Thanks again

    Chris G

  • commercialking30th April, 2004

    Ok, so get the operating income and expenses out of the seller. Add some expenses for maintenance which he does not appear to be doing.

    Its worth 10 times the NOI 9 times is a good deal 8 times is a very good deal. Make him an offer at 7.

  • sharpREI_PA30th April, 2004

    Thanks commercialking,
    Once I get more numbers to crunch, I can actually see what I am looking at. I will use what you said when making decision on an offer. Any other suggestions are welcome as well. I guess I can't really do much more til I have more figures in front of me though.

    Chris G

  • Taiyo1st May, 2004

    Make sure to ask to see 2 or 3 years of the Owner's tax returns during your free look period. This will either confirm/not confirm the income and expense figures provided by the Owner.

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