The owner approached me. I don't trust how easy this feels.

I've been mailing a small absentee list for a first rental, badly and slowly. What actually happened is a woman two doors down from a property I mailed called me because her sister got my letter and passed it along.

Her situation: duplex, both sides 2/1, owned since 2004, she lives out of state now and has been using a manager who she says stopped answering. Side A rents for 875, side B has been empty since February because the previous tenant left it rough. She wants 210k. My own comps on duplexes in that area, and there are only four in the last year, land between 195k and 240k depending on condition.

What I've confirmed: taxes 2,840, insurance quoted at 1,650, roof is 19 years old per the permit record. What I have not confirmed: anything about side B beyond her description, and whether the 875 on side A is on a lease or a handshake.

My math at 210k with 25 percent down, both sides at 900, is thin once I put real numbers on vacancy and repairs, and it's negative if the roof goes in year two. At 190k it works.

The part I'm stuck on is that she came to me and seems to trust me, and I don't want to be the person who takes advantage of someone who has been ignored by her manager. I also can't pay 210. Trying to work out how to bring a lower number without blowing up the only lead I've got.

4 replies

1jessreyes12AU1APRO8

Get inside side B before you talk price at all. "Left it rough" from an out of state owner who hasn't heard from her manager could mean carpet or it could mean the manager hasn't been in there since February either. I'd want eyes on it plus water turned on, because a duplex that's been sitting since winter can have a plumbing surprise nobody has discovered yet.

Also ask her directly what she owes on it. If there's a payoff of 60k on a 2004 purchase, she has room to take 190 and she knows it.

1megan_doyle15 Get yours

How did the sister passing the letter along work exactly? I've been assuming the only responses come from the person whose name is on the record.

2carlos_nunezActive

Your four comps in a year is the weakest number in the post. Duplexes trade thin and 195 to 240 is not a range, it's a shrug. I'd put more weight on what the thing produces than on what four sales did, and at 1,800 gross with 2,840 taxes and 1,650 insurance you're paying 210 for something that needs a 5 to 7k reserve on day one just for the roof clock.

Offer 188 with a 14 day inspection window and tell her why, in numbers, on one page. Sellers who came to you take a low number better than sellers who listed. The manager who stopped answering is your best argument, because what she wants is to stop dealing with this.

The owner approached me. I don't trust how easy this feels.

4 replies