What is the cash flow on the property? Is it worth 175k? I severely doubt it has positive cash flow or any equity. My guess is you would be paying more than it is worth. Even for no money down, it’s a ‘pass’ in my book. As for haggling down the price or terms, why don’t you ask him? Point out the problems above…
Posted by Karl Grube on June 03, 1999 at 19:09:10:
Here is a way to check out your $175,000 price. Put together a local contractors duplex turnkey price. You can also use a Marshall-Swift Construction computer projection for your area. Insurance companies use this technique for structural replacement costs.
The rental units should come in at $75,000 each or less to make your rental numbers work. You will have no problem getting $875 each for “new” units. if you hold these for five years, you will have a great asset to sell on contract or even for cash!