Ok, let me give some detail before I get to the question.
I was talking to my Mother the other day about my parents' retirement account. My Mom is retired and my Dad still works, but they don't have much in their retirement or savings... that worries me because I know my Dad will not be able to work forever.
To make a long story short, I was telling my Mom about a property I found online and before the conversation went any further, she said, "Stop right there, I am going to put my money where your mouth is."
She said, "You are always saying you have found a deal, but you never do anything with it and then you check on it later and someone has already purchased it. I am going to front you the money to buy your first deal and then we'll see how you do. If it all works out, then we'll partner and do more deals with you so you can help us fund our retirement account and if it all goes to heck then I don't want to hear about anymore deals."
I guess I hit a nerve. Anyway, my only excuse (for years) after I would research a deal was, "I don't have the money for a down payment." Well... now I don't have that excuse anymore. Talk about being put on the spot.
So now that I have my finance partner, I am ready to take that plunge. I am tired of looking back saying, "If I only...." you can fill in the blank.
My question relates to one of Dean's videos about offering a lower price for properties that bave been on the market 90 days or longer. Well I am looking at two duplexes, 4 units total that have been on the market for more than 240 each. The asking price is $74,900 for each duplex and the county has the appraised values of each duplex at $150,000 each. However, Zillow.com has the market value at about $180,000 per duplex.
If I'm doing my math right, that is between 50% - 60% off ARV. If that is the case should I still offer less than asking price because they have been on the market so long?
The duplexes were completed in 2007, so there would be a very minimal about of repair work done before trying to sell or rent. I am pretty sure we could keep it under 70% ARV, which is what other DG family members tells me is the key number.
Wait there's more... Is there a rule of thumb formula for figuring what your rents should be compared to the value of the house, or are they strictly determined by what the markete will bare?
I apologize for the lengthy post, but as it is titled... I have "no more excuses" in 2009 for changing my financial future. It is all in my hands now.
Thanks in advance to all those who respond.