I have come across a 2 br flat in pretty run down condition. The vendor is a property investor but has lost his job and wants to sell as he can't afford the payments. It is currently tenanted and bringing just under 1k a month, however the asking price is too high (300 – 350) and given I will be borrowing the entire amount there is little chance i can make it CF+. What can i do?
Its sounds as if he is pretty motivated. find out a price that will work for you and offer it. He can only say no, he might even say yes. You never know just how desperate he may be. If you don't ask the only answer is a no!
argue a good case. show him the numbers that work for you. maybe get a valuation.
There are very few properties that are cash flow positive unless in a mining town it would pay to do your home work and see what comparitive properties have sold for in the area, as although it may not be cash flow positive it may still be a good buy. Then you would have to work out whether you are prepared to foot the difference, it would probably be worth your while discussing with your accountant to see if tax relief etc would help to make it a better cash flow
Hi Fishman,
It probably all comes down to your own personal strategy.
If you are of the "Positive Cash Flow Only" camp, then perhaps, at this asking price, you should leave it.
Therefore, you could try to negotiate a better price, and if this can't be done then once again you should leave it.
If however it is in an area that is likely to have enormouse capital growth over the next week/month/year, then perhaps you could crunch the numbers and see if you can afford the short term loss for the longer term gain ?
Would buying this property move you closer to your goals ?
I hope this helps,
Thanks,
BDM
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