How low to offer? (by Ken [TX]) Aug 15, 2011 8:17 AM
How low to offer? (by Roy [AL]) Aug 15, 2011 8:36 AM
How low to offer? (by Anon [PA]) Aug 15, 2011 8:55 AM
How low to offer? (by 574-Brad [IN]) Aug 15, 2011 9:18 AM
How low to offer? (by Red [GA]) Aug 15, 2011 9:39 AM
How low to offer? (by Ellie [IL]) Aug 15, 2011 10:17 AM
How low to offer? (by BRAD 20,000 [IN]) Aug 15, 2011 11:14 AM
How low to offer? (by Mike45 [NV]) Aug 15, 2011 11:29 AM
How low to offer? (by Deejay [TX]) Aug 15, 2011 12:12 PM
How low to offer? (by Ellie [IL]) Aug 15, 2011 12:43 PM
How low to offer? (by LL [AZ]) Aug 15, 2011 12:52 PM
How low to offer? (by Txmike [TX]) Aug 15, 2011 2:56 PM
How low to offer? (by BRAD 20,000 [IN]) Aug 15, 2011 10:32 PM
How low to offer? (by Ken [TX]) Aug 16, 2011 6:45 AM
How low to offer? (by Ken [TX]) Posted on: Aug 15, 2011 8:17 AM Message:
State Specific Question About: TEXAS (TX)
We're about to make an offer on a nice 1500 sf 3/2. It's in great shape in a nice neighborhood, but needs some minor kitchen updating and landscaping help. All I can do for $3-$5k.
It's listed for $140k and it's been on the market for 200 days. Market value is prob about $135 - 140. Personally, I think it hasn't sold because of the aesthetics of the landscape and kitchen.
BTW, I should be able to rent it for $1200 - $1250/mo.
I'm thinking of offering $113k and see where that takes us. I have other irons in the fire so I won't cry if I lose it, but it is my top choice, so I want to make a real offer. --208.124.xx.xxx |
How low to offer? (by Roy [AL]) Posted on: Aug 15, 2011 8:36 AM Message:
That house has been on the market for 200 days because no one has been able to get a mortgage loan to buy it.
I would offer $90K and go no higher than $95K assuming the house is really worth $140K in a normal RE market. --76.18.xxx.xxx |
How low to offer? (by Anon [PA]) Posted on: Aug 15, 2011 8:55 AM Message:
Applying the 1% rule I think at the rent of $1200 you will barely make enough to pay for mortgage, tax, etc. There can be vacancy, unexpected repairs, tax and insurance can go up and all these things to keep in mind. The above I learned from my mistakes. You may have to lower the offer way down even below than what Roy suggests. --128.91.xxx.xxx |
How low to offer? (by 574-Brad [IN]) Posted on: Aug 15, 2011 9:18 AM Message:
I want your offer to be so low, you're afraid they will try to press criminal charges! Don't be shy! You can always go higher How are you going to make any money buying for $113,000 and renting it for $1,200? --66.228.xxx.xxx |
How low to offer? (by Red [GA]) Posted on: Aug 15, 2011 9:39 AM Message:
I just paid $96K for a house, I'll be renting for $1290. There is no way I'd be paying over a $100K for that house. If they don't like their offer, I'm sure there are more out there that would. This is doubly true if you are buying all cash. --65.12.xxx.xxx |
How low to offer? (by Ellie [IL]) Posted on: Aug 15, 2011 10:17 AM Message:
A few years back people laughed at me sticking to the 1% rule. Said it didn't matter because houses were going up in value. And the 1% rule is the top end. The maximum. Now those people are bankrupt and I am still operating and the bank is anxious to loan me money.
You are paying too much.
--208.94.xxx.xxx |
How low to offer? (by BRAD 20,000 [IN]) Posted on: Aug 15, 2011 11:14 AM Message:
I want more than the 1%. Many of ours are 2%.
I'm averaging 1 a month for 50% of current market value.
574-Brad is right on. If the realtor does not balk and say "I can't present THIS!" you're too high. You'll be AMAZED at the low counter offers you'll get.
Just had a seller drop $15,000 in one round.
Remember the realtor does not make a penny until he convinces YOU to spend money.
--50.129.xxx.xxx |
How low to offer? (by Mike45 [NV]) Posted on: Aug 15, 2011 11:29 AM Message:
I try to use a 1.5 - 2% rule. I can't break even at 1%. Not in this economy, and without being able to count on rising real estate prices.
--216.240.xx.xxx |
How low to offer? (by Deejay [TX]) Posted on: Aug 15, 2011 12:12 PM Message:
What is the 1% rule? Asking price is irrelevant to you. My general rule of thumb is rent x 72 = purchase price. Submit proof of funds or proof of financing with offer. --166.147.xx.xx |
How low to offer? (by Ellie [IL]) Posted on: Aug 15, 2011 12:43 PM Message:
Dejay
The 1% rule is that rent has to be at least 1% of purchase price and as others have said we are usually looking at 2%. 1% is the maximum for something you really want for some purpose.
My last purchase cost me $28,000 for 2 houses and 2 garages on a double lot. Rent for the 2 runs $1325 per month. Compare that to getting $1250 a month and investing $118,000.
There are bargains out there but you have to hunt for them. My bargain was a bank repo --208.94.xxx.xxx |
How low to offer? (by LL [AZ]) Posted on: Aug 15, 2011 12:52 PM Message:
The 1% rule roughly states that a property should return 1% of purchase price in monthly rent.
Example: A $100,000 property should return at least $1,000 a month to be profitable.
As the others have said you want to offer as little as possible in this case. HOWEVER this property has been on the market for 200 days because there is a totally unrealistic seller somewhere in the picture or a totally inept bank officer.
Or it is poorly located.
I ONLY buy properties in excellent locations, and even in this market the last three properties we bought had bidding wars. Good properties are always in demand. They are in demand because you can resell them if you want.
But even in bidding wars, you sometimes have to walk away.
I'm not a trailer person, but awhile ago I bid on a doublewide on a lot (fee simple) that the bank wanted I think it was $17,000. We offered I think $6,000. We are talking a mobile with a hole in the roof, but that was OK, because any water would drain out the hole in the floor.
Lot value in the area was about $10,000 minus the value deduction for the FIVE pit bulls I saw across the street. The place ultimately sold for $21,000 to some idiot.
The point of this story is - don't be an idiot.
99% of the "deals" out there the number simply do not work. They may never work. The only people buying such properties will be homeowners who will overpay and probably have difficulty selling in the future unless values appreciate. --76.170.xxx.xxx |
How low to offer? (by Txmike [TX]) Posted on: Aug 15, 2011 2:56 PM Message:
Your offer is too high for a house listed that long. Start with 90k, and go no more than 105k. --71.164.xxx.xxx |
How low to offer? (by BRAD 20,000 [IN]) Posted on: Aug 15, 2011 10:32 PM Message:
to clarify: I want more than 1% and up to 2% of MARKET VALUE, but buy at half of market.
Buying right makes renting profitable. Profit leads to FUN! --50.129.xxx.xxx |
How low to offer? (by Ken [TX]) Posted on: Aug 16, 2011 6:45 AM Message:
I'm putting in a $90k cash offer this morning. Thanks guys for all your advice. This is a great place. --208.124.xx.xxx |
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