Looking at an investment property in a community.

This townhouse is a Fannie Mae Homepath property and is a REO listed for 189K.

I am trying to determine the market value of the property.

The good news is there are some properties that are basically same layout as reference points.

One townhouse that is exactly the same but slightly larger lot sold for 134,300 sold on May 2010. It was a foreclosure sale.

Another one also same layout with same lot size sold on Sep 2011 for 155000. That was a Freddie Mac foreclosure sale.

There is a townhouse right next to it, sharing an adjoining wall, and was a short sale. MLS says "PENDING" and my agent told me a contract was submitted to the bank, it was listed at 178K but no idea what the buyer offered and no idea if the bank will accept and how long it would take.

What I do know, and this is information relayed to my buyer agent from the listing agent, is the property was offered as a short sale, they had an offer for 140K, the bank countered 169K, the buyer walked, and the bank let the property goes into foreclosure and now it is offered again at 189K. The listing agent said further that he THINKS he can get the bank to accept an offer in the 170s but anything lower *HE IS NOT SURE*.

Now I know the price fluctuates a lot during the last two years, but two identical properties one at 134K one at 155K suggests the property 170s is high. The miami property appraiser website assessed it at 172K but I am not sure that has meaning beyond taxation.

It is true I have no idea of the conditions of the two sold properties, may be they were in fixer upper shape. The one I am looking looks to be in pretty good shape (don't know for sure until I have an inspection done), except I did see a major crack in a support beam, and the floor is not sloping in one direction a little (which could mean there is a settlement problem). Being this is a Fannie Mae property and they asked for an ASIS contract any sort of repair I don't think they care or will entertain any considerations should major problems be found during inspections, correct?

My buyer agent had sent me 50 other properties with closed sales as comparable data points, but those are further away and not the same, I still think the best "comparables" are the same building on the same street, which takes me back to the same two properties listed above.

I am thinking to offer 160K with a ceiling of 165K. I am trying to decide if I should start with 160K or offer 165K up front, will they counter?

I am also going to offer cash. Will this give me some leverage on prices? There are no other offer I was told at this point.

Thanks in advance for any comments on strategies, DOs and DONTs.

how about asking the listing agent to justify the listing price? BPO, full appraisal, comps, etc.

You can offer whatever you want. FNMA wants $189K for the property no matter what you believe your "comps" indicate. No one, including the listing agent can easily convince FNMA otherwise.

FNMA properties usually follow a pattern of reductions during the listing period. When thinking about making an offer on FNMA properties, your agent should look for the last time the asking price was reduced and figure that there will be a similar reduction aprx 30 days from that. FNMA reduces in a step-wise fashion waiting to see if a reduction brings an offer or interest at that price point. The trick is to catch a FNMA with a lower offer just about the time another reduction can be anticipated.

Also, in my experience, FNMA opens high; sometimes slightly higher than retail if the property is in average condition.

And please don't ask the listing agent to "justify" the asking price. More than likely his valuation was lower and FNMA never listens. Neither will he have access or get access to the appraisal (if there was one prior to listing). Listing agents have very little influence with FNMA or other default sellers.

As a Fannie Mae Homepath property they are not looking for an investor as the purchaser, they want a homeowner to buy it. Homepath properties allow a potential homeowner to purchase the home with minimal up front money (ironically one of the very things that started this housing bust anyway!). At this point their asking price is more an indicator of their current minimum net they need to obtain for the property. If the price is too high it won't sell and will eventually be adjusted. The assessed value of $182,000 is not really a good indicator of value. It will probably appraise for close to or slightly above the list price. At the present the lowest price you would probably get accepted is $179,900 with them contributing up to $1500.00 in closing costs since you are paying cash. Even at $165,000.00 you are probably wasting your time. If you do want to get any serious consideration for a low ball offer like that it should be accompanied by a earnest money deposit of at least $10,000.00 with only an inspection contingency attached and a proposed closing date within 21 days of the offer. The seller has to present it. Forget the offer of $160,000.00, go in with your highest and best offer.

I typically put in 10% deposit so I had planned on putting $16000 as deposit so that's not a problem.

However, with two identical layout identical size sold at substantially lower price, how can they appraise it close to the listing, unless they are saying since it's 4 months ago the price have trended up 22%?

Since I am paying cash there wouldn't be an appraisal.

From what you are saying, an offer to pay cash is not going to give me any additional leverage because they want to sell to owner occupants? In that case I might as well go in with a financing contingency in case I can get a good rate for a loan even though I might not need it?

In talking to my agent however, she said due to the Fannie Mae having very strict rules in determining who are owner occupants, most true owner occupants do not qualify and have to offer as investors anyways. She said the test is on the day you submit an offer if you own another home you are consider an investor. That means those who have a contract on their home waiting for closing, and want to buy another one, or those who wants to buy contingent upon selling their present home, or even those who owns time shares, cannot be considered owner occupants from Fannie Mae's standpoint and have to apply as investors. The leverage I guess is with really the FIRST TIME NEVER OWNED A HOME type buyers.

OK some new developments.

I found out something unsettling about the property.

The kitchen is an open kitchen right below the second floor. The kitchen is completely open to the living room. A span of 27 feet with no support. It got me thinking, may be it didn't used to be that open? I called up the building department and asked to see previous permits and floor plans. They did some renovations but never pulled any permits. NONE. Being an engineer myself I can see the substandard work. But the big thing is that they did take out a load bearing wall that supported the edge of the bedroom above.

This is a major issue.

I am trying to decide if I should walk away.

If I raise this point to Fannie Mae would they even care? Would they consider some price reduction due to this issue? I think not.

Even though you will be purchasing the property as-is, you still have the right to have the property inspected. Any offer must include a contingency for an inspection. You won't have to pay for the inspection until your offer is accepted. If it is then you will likely have a 10 day due dilligence period to complete the inspection. If you are not satisfied you can walk.

Since the property is an REO the lender had the property appraised before they established the selling price. That is the appraisal I am making reference to. Additionally, just because your paying cash doesn't mean that you can't also include an appraisal contingency in the offer and pay for your own appraisal. Some investors do this to make sure they are not over paying for a property.

The inspection is not an issue. I am a professional engineer so I am familiar with code and construction, so at this point I already know the issues that would have been included into the inspection. The only thing I can't test is water and electrical because those are turned off so there is a bunch of things I couldn't test. I already know by walking around what it takes to remedy these issues and have an estimate at hand. However, this is a "minimum" because I don't know what else to expect during the inspection if water and power is turned on, and of course termite inspection is separate.

The point being whatever I know now is already quite discouraging.

It is my understanding that bringing these issues to Fannie Mae makes no difference, they don't care, don't have time to care, and the offer is submitted by listing agent through online forms with no provisions of this sort.

Any deviation from the addendum with any contingency will kill the deal, my agent told me.

If I go ahead and submit the offer, and let's say it gets accepted, and later on the inspection comes up with a $5000 repair bill, Fannie Mae is not going to lower the price. So if I want some consideration for the repair, I might as well lower my offer in my first offer.

Basically I need to go in with the price I am comfortable with, taking all defects into account. However, there is no provision for me to justify my lower offer to the asset manager, correct?

The inspection is an issue because it provides you the basis you would need to present to Fannie Mae to request either repairs or a price deduction. I've never heard of a Fannie Mae provision that would not allow you to present a contract with an inspection contingency. If you go in with the idea of lowering your offer "just in case" there are needed repairs, then your offer probably won't even merit a counter offer, just a request for your best and highest offer. Offer what you are willing to pay for the property with an inspection contingency and a 10 day due diligence for the inspection if the offer is accepted. If the inspection uncovers the repairs you are anticipating then you can request that Fannie Mae adjust the selling priced based upon the estimates provided by the inspector (make sure you choose one that offers this as a part of the inspection). If they refuse then you can exercise your due diligence and walk with your earnest money. If your agent believes that you cannot make any offer to Fannie Mae with a contingency then I would suggest that you secure the services of an agent who is more familiar with the Fannie Mae process.

OK, I think there is an misunderstanding.

My offer has an inspection contingency. It allows me to walk away if the inspection comes up with any defect I am not comfortable with. My agent says, if the inspection turns up an estimated repair bill of say $5000, you can void the contract and walk away, but you cannot tell Fannie Mae to lower the price by $5000, they don't care. It is AS-IS, you take it or leave it.

I have not submitted the offer yet.

I already know what a formal inspection will bring. If you pay for an inspection, my company are the ones the inspectors themselves call for an expert opinion if they get a difficult case. So what I am saying is, I already know from my two visits to the property, what issues are at hand, and there are major issues. If an inspection is to be done, it would only be worse, if additional things can be tested once water and power are turned back on.

So my rationale is this, if I already know the inspection result (the BEST case scenerio), why would I submit an offer pretending the house is OK, only to pay for an inspection later to let me know what I already know, and if Fannie Mae will not lower the price to account for it, I will walk anyways.

On the other hand, if I take the repair estimate into account, and lower the offer right off the bet, then they have a higher chance of rejecting my offer. Seems like at least this approach it is not a total waste of time.

Of course, I am basing this on what my agent told me, which is Fannie Mae will not remedy or reduce price if inspection uncovers major issues.

For us, the inspection contingency just means that "this buyer's interest in buying the property is contingent on the Buyer still being as happy with the purchase after the inspection as s/he was before the inspection. If they're not happy, they walk!

We used to fiddle around with sophisticated inspection contingencies that had specific wording to the effect that a failed inspection was one where more that $XXXX.XX worth of latent defects were discovered; meaning that a successful inspection was one where there was less than $XXXX.XX.

What a waste of time! It made for so much additional effort in obtaining estimates from multiple contractors (of which only one(1) might actually get the work) and ensuing discussions (arguments) about what might need to be done, who's best qualified to do it, and how much it will actually cost . . . . so that in the end, we now just cut to the chase. "Either you still like the house or you don't."

If you're really so concerned about hidden defects, then obtain permission to perform an inspection BEFORE even making an Offer. Then you can structure the amount to take your discoveries into account. Your risk is the cost of the inspection (and that someone else may buy the property while you're still looking at it); but that's a cost of wanting to be so precise.

We're not building the Titan Missile over here . . . . just trying to sell Real Estate.

That was my original question, is whether I should structure the amount to offer to take into the discoveries. For all practical purposes, I am a licensed professional have already done the inspections myself, so this is like an inspector going to buy a house - the inspections have been done, I know what are the defects, if I move forward, I will hire out an inspection by someone else and get a "second" opinion, that's all.

I think the answer is yes, I should structure my offer, taking into accounts defects that I already know that are major issues.

Then don't waste your money on an "inspection"; just disclose your own credentials, which will probably carry more weight than the observations of some Inspector.

If the AM and/or the LA consider your observations to be less than objective, and indeed, self-serving, then so be it . . . . move on to another property and leave them to deal with, and disclose, your observations to the next Buyer (if they can remember to do so (and if not, deal with the legal consequences of not doing so).

You're getting some great information here.

So, to clarify, from your original post, you were at around $165K max. Your agent said you MIGHT be successful at $170K. However, you've discovered a defect you believe to exist that you believe would cost you $5K to remediate. So, are you back to your original original thoughts at $160K? If so, no matter what your offer rationale would be, that offer most likely would not be acceptable to FNMA at this time against FNMA's $189K.

With respect to making a HIGHER offer (one that is not discounted for the $5K remediation you believe would have to be done) and on the off-chance that FNMA accepts your low offer against asking, and then "inspecting" the property and "finding" this $5K remediation needed and then telling FNMA to lower the price-- in my experience that doesn't work.

What happens, in my experience is (and it's very possible that FNMA would consider an inspection by a buyer with your credentials to be valid) is that FNMA could agree to have the repairs made and tack that repair cost ON TOP of the agreed purchase price-- and that bid to remediate may be higher than your $5K estimate; or, if you fought back, saying YOU'D make the repairs and pay for them, FNMA probably would say okay, but the repairs would be performed by FNMA's contractor and you'd pay whatever that cost is.

Other agents' experience may vary.

Hysterical! You made my day!

But we are talking about Fannie here, and I personally need Titan Missiles, drones, chemicals, and all types of weaponry including covert intelligence at my disposal just to LIVE through a Fannie deal without ending up in smoke and ash.

DueDiligence, I am going in with 165K.

The listing agent told my agent he can *PROBABLY* get the bank to accept an offer in the low 170s.

I looked at all the factors and decided that 165K works for me and that's what I am going to do. Right now my lawyer is reviewing the contract, after that the offer will be submitted.

If it gets rejected it gets rejected. That's the best price I can do and I told my agent I will not be able to accept a counter offer either. We shall see.

Thanks to everyone who commented.

Make sure you provide some supportive comps and even a list of the repair issues you have uncovered. If you give them the supportive data for your offer it may merit more careful consideration.

My experience with Fannie is that they will make repairs to get a property to closing but won't reduce a contract price. I've had them replace water heaters, electric breaker boxes and furnaces. If there is mold, I've had them remediate the situation with a licensed contactor that specializes in environmental issues. They even have an appliance program if there are missing appliances.
Maybe the agent should call in the SAMS contactor now.

Same here-- but those repairs, in my experience, were made before even listing the property. The FNMAs I've worked on had to be checked out for the problems you mentioned, even missing shingles, siding, appliances, carpeting, and the physical plant. FNMA typically doesn't like big inspection surprises like the furnace doesn't work. Something like that or similar should have been checked out prior to listing and remediated.

It's possible, of course, that a LA prefers NOT to report some of the above problems fearing s/he will be responsible for fronting the $$ to repair and wait until after COE to be reimbursed and they pop up during a buyer's inspection or lender appraisal.

The "defect" that the OP claims exists probably wasn't observable by the listing agent.

An update. I have submitted the offer. I didn't tell them about what I found. I simply decided to let the offer stands on it's own without all the noises.

The reason? My buyer agent advised me not to say anything. Her rationale is, once the offer is sent to the listing agent, they will take the offer parameters and submit to Fannie Mae via an online form, which is all mechanical and have no provisions for special considerations or circumstances. More than likely, the asset manager won't bother with it or won't care. Her advice is to make it as simple and as straight forward at this stage for them to either accept, reject or counter, and don't give them reasons to reject because they want to pause and think.

Now back to the actual defects themselves. When I first walked the property the first thing I checked was look under the sinks and electrical panels. That immediately tells me the renovations they did was unpermitted because they were not only sloppy and unprofessional, they were unsafe and illegal. But those are simple fixes, $200 here, $350 there, all fixable, no big hassles either.

But when I looked at the entire interior layout as a whole, I saw a problem. This is probably not observable to the untrained eyes, but there is a structural issue. They removed an entire load bearing wall in the kitchen to turn a closed kitchen into an open kitchen, and now, the entire second floor that is directly above the kitchen "hangs" there. Imagine a table with three legs and a forth completely missing. The fix? You can't put the wall back. Where the footprint of the wall used to be, they now have a 15' long kitchen island there! With sinks and dishwasher etc...Is there a way to "fix" it? Yes, as a licensed structural engineer I can think of a few, but none of them simple and cheap, but fixable. I immediately went to the city and got a copy of their permits and plans, and guessed what? The plans confirmed what I suspected, there was a load bearing wall they took out. This was a major renovation and they did not pull any permit, they removed walls, moved plumbing connections, moved electrical, and all of those were done by handyman probably. I didn't even bother to check how they might have vented the island sink drain, as I am 100% sure they would not have done it right.

Long story short, not only there is a MAJOR issue, but if not corrected, the next owner will face with the same problem (having illegal work done) should he/she try to sell it later. Of all the potential buyers I am probably the best equipped to remedy it because I can draw and file new plans and sign it myself to rectify it, and have it fixed at cost.

Now, the waiting game.

I am still waiting...

My original offer was sent in. I had to make a few minor changes, nothing major, the listing agent asked me to fill in the blanks (where the contract says "if left blank it's 10 days, if left blank it's 30 days...) I left those blanks and the LA wanted me to fill them in explicitly. No problem. Made the changes and sent in again.

Now they said the asset manager is no longer handling this file, and someone new would be assigned. Grrrrr...

I heard from the bank.

Their asking was 189K, my offer 165K.

The LA called my buyer agent and said the bank countered with 187K and a 3 month deed restriction.

The LA advised to counter the bank's counter with 166K and said the bank's current price is not in alignment with the market. Comparables are in the 155-170K range according to my agents.

Oh well, I think we are too far apart.

Hey, don't give up on the first counter! They'll come back hard first time around. They are more or less required to counter several times in my experience.

Increase your offer by $1K. When they counter again, come up $500. They'll counter again. You then reiterate your last $166,500 offer. If they counter again, reiterate again. If they ask for highest and best, go $166,500 again. You have nothing to lose. And you might win. Give it a try!

If you can't hammer them down now by doing the above, wait until the next price reduction, rinse and repeat. Hopefully it won't get sold in the interim!

DueDiligence I am trying.

I countered by adding $1000. Now they came back with more "terms". Like wanting to close sooner etc...

So now I am going back and forth with them on other items, and I kept telling them those I am flexible but seems waste of time to discuss those unless we agree on a price, and the price is still far apart. They haven't come back with a second counter on prices yet.

DueD - I like that!

Good for you!

Can you clarify HOW (in what form) did they "come back" with other terms? How were you notified? If verbally from your agent, please have the agent write you an email telling you what they said and how they said it. How are you going "back and forth"? That seems very odd.

It would seem to be a counter-offer. That's the only way they can communicate with you at this point. It COULD BE (don't break out the champagne yet), that POSSIBLY they've accepted your purchase price. They've said, "Okay... but in addition to the price we want this"-- earlier closing, more earnest money. They've countered on terms.

Please find out and get back to us ASAP?

{{{giggle}}} TYVM, my friend!

My first offer to them was 165K, AS IS, 10 day inspection contingency, all cash, $5000 earnest money, closing in 45 days.

No news for 5 days. My buyer agent called to check, was told asset manager has been switched.

Two more days, new asset manager told the listing agent to counter with 187K, lowered only by 2K, plus a 10% earnest money, and a 3 month deed restriction. I assume it was verbal by the LA to my agent over the phone. My agent then called me and discussed it.

I then emailed back and said my "best and final" offer is 166K, 3 month deed restriction OK, 10% earnest money OK.

However, I also added that I have no financial contingency does not necessarily mean I would pay cash, I might get a loan (I already have a pre-approval), and I don't know it the deed restriction would end up handcuffing my lender from selling the loan off to someone else, or if I pay cash prevent me from refinancing in 3 months. I said I don't necessarily have a problem with it, but seems unnecessary. That was all done with email yesterday.

Then this morning my agent called and said the LA had made contact again and wanted a closing date that is sooner, not 45 days out but 25 days out. I said why are we worrying about this when the price is so far apart, and if we go back and forth for another week we would lose time since the LA wanted a "fixed" date in the contract instead of "X days from an executed contract signed by all parties". I asked if we need to deal with this now she said yes, because they had to "do some forms".

I then asked my agent if we should send in some comps because the price is set too high. She told me the LA already is aware and is trying to get them to lower it. The problem seems to be the bank had paid $42000 to the city for some fines (not cleaning gutters, not mowing lawn, not removing trash...back dues all fined on a per day basis) and they wanted to recoup some $.

I said let me think about it and then I text messaged my agent to tell her to go with March 15 as closing date. She texted back OK.

So it's all done email, verbal, text...

The original offer's expiration date has come and gone.

Why are these minor terms even an issue? I told them those terms I am prepared to be flexible on but why waste time on those? I think if they don't accept I am going to wait 30 days and resubmit.

The 3 month deed restriction has nothing to do with the mortgage, it just prevents you from re-selling the property for 90 days. They are requesting a closing date within 25 days because they are feeling you out to see if this really is a cash offer. If they go below their pre-determined net, they want to make sure it will close quickly in a declining market. If you have the cash you need to stick with that, you can always finance after the fact.

That may be a very wise strategy . . . . take it away from them for a while, and let them chase you.

That works in training dogs (and children), and it will probably work to get the AM to settle down and get serious.

(Unless there are other offers in the mix, and that does not appear to be the case here)

HomeTeam is correct. FNMA is teetering on accepting your offer. The compelling aspect of your offer is CASH. That's why the 10% earnest and the 25-day close.

You need to understand all the dogs in this fight. The AM is telling the LA "DO NOT lose this buyer"; however, at the same time the AM has to make certain moves that MAY upset you. You just have to play the game.

Despite what you believe a fair "value" is on this home, FNMA wants to get the most possible for the property. So, FNMA has net price parameters at each price point, and a timed-release reduction protocol. To get FNMA to discard those and take far less, requires timing. You may have come at them at just about the right time when a reduction is planned that puts your offer closer to the next price point tolerances. Just barely.

It's somewhat doubtful that FNMA paid the fines. Fannie don't pay nothin no how. Probably those were put back on the servicer. That's just either the LA or the FNMA AMC crying the blues.

So, if you really want this property, have a clear head, take nothing personally (long wait times to hear back, annoying questions, no frank answer on the offer price, etc.)

So right now I am just playing the waiting game. So far no news.

I have noticed they have reduced the asking price of the property to the one they countered me with the next day (that was yesterday).

Should I continue to wait or ask my agent to press for an answer?

I am curious now what the $42000 fine from the city is all about.

My agent told me the LA said "they have clear title for this place, had to pay the city $42000 of fines".

Is there a way I can research what this is all about? a 42K fine on a 180K property?

I am going to run some searches.

Check with the courthouse, there may have been a court judgement or lein placed against the house, or it could have been an assessment of some type.

Actually, this is a good "heads up" to check with the City of Orlando and verify that there aren't other recurring costs that were/are being imposed on that property (and others in the area) about which you were not advised BEFORE you made your first Offer.

$42,000 seems like an awful lot . . . . what were they; Zoning Violations with Fines and Penalties, all accruing Interest over an extended period of time ?

Vermont, the property is located in Miami Florida, not Orlando. But I will research the fines and see what I can find.

NEW DEVELOPMENT!

This afternoon, I noticed the LA adjusted the asking price on the MLS to $170,900. This is odd. I told my agent and she called to find out what's going on.

The LA told her that they think my offer is good and they have sent it in for approval and should hear back Monday. Who are "they"? Does it mean the LA knows it's good and need approval of AM? or AM knows it's good but need approval of someone higher up?

Why did they adjust the price down to this odd number that is still 5K above my asking? To try to get multiple offers over the weekend?

If they come back on Monday with an acceptance how long do I have to accept and sign their acceptance? Can I stall them one day while I hunt down this mysterious $42000 "FINE"?

You should be happy. It's not an odd number-- it's being set within tolerances so your offer can be accepted. "They" isn't a mysterious entity. "They" is management. It's passed the FNMA AM, and being sent on for final approval. You'll be getting the for real for real FNMA Addendum shortly.

You're going to get what you want. Are you worried about that? Didn't think they'd accept your offer? Hope you're not getting cold feet... I've seen that happen before. Buyer makes an offer that s/he believes will NEVER be accepted, and bingo! it's accepted and the buyer starts stalling, MOST of the time because there was no real intention of buying the property. You're not that guy, are you?

Noooo...if they accept I will jump. I am just curious about this $42000 fine. I am worried about who else is "OWED" money that may be filing a lien. I better buy a good title insurance and do a good title search!

A title search and title insurance should answer the question. They have to transfer the property to you with a clear title although they may use a Special Warranty Deed instead of a General Warranty Deed. Ask you agent about the difference, let her earn her fee.

I didn't read all of this.

The main point is WHY are you buying this property??

Is it to live in for yourself,a vacation home,to rehab and flip,to wholesale,to hold as a rental,etc.??

Each answer will have a different set of metrics where you will have a different value on it.

For yourself to live in will have an emotional component and maybe a numbers component.Vacation same thing. The other 3 should not be emotional and based on numbers only.Especially if you are paying all cash you need to analyze how best to grow your money for annual ROI.

Do not get emotionally tied into and accept a marginal deal.Move on to the next one.You have cash and in many markets cash is king.

Price will also depend on financing.

1.Owner finance
2.Bank finance with seller held second
3.All Bank finance
4.All cash

I am buying it as a rental property in a very stable community which I believe the prices have bottomed out. I think it is a fairly good deal, not great or amazing deal but good.

After some searches in the County's records I found a bunch of liens against the previous owner.

From the bank, from the mortgage company, from HOA, from city etc...

The LA told us the bank paid $42000 to clear a city fine so they have clear title. I did see a city lien placed on the property, for "FAILURE TO OBTAIN PROPER PERMITS AND INSPECTIONS FOR INSTALLATION OF FENCE OR SHED". They city filed an imposition of fine and lien on 1/2010 and the bank didn't take over the property till 10/2011. The city says failure to comply with that final order will result in an additional fine of $250 per day plus special assessments and cost covered to the city for enforcement. $250 a day! WOW, 100 days would be $25000! All for a fence or shed!

People have to get with the program !

But in bad times, this is another lucrative source of revenue.

And has the deviant shed and fence now been removed ?

I did not see any shed. There is a fence in the back from looked "original" because it looks the same as the neighbor's.

$250 a day is really steep though!

How much rent will the 170,000 house generate??

If the property doesn't work well for cash flow then it is an appreciation play and not an investment.

In my area we can buy foreclosures 3 bed 2 bath for list 55,000 and pay 45,000 cash.Then put in 10k to 15k in reno to get rent ready.

Now for 55k to 60k all in we have a property that rents for 900 to 1,000 a month.

Based off of what you are paying you should generate 2,800 to 3,000 a month in rent for the price you are paying.I doubt that is the case.

If you already have millions from being aggressive early on in your investment career then you can buy properties that tread water for the appreciation play and tax income reasons.

If not you need to either pass on this property or get it financed with little down and save cash for other invesmtments and to stay liquid.

Today the LA informed us the bank countered at 169000 and a 19 day closing.

I told my agent to let them know my last offer of 166000 was truly my best offer but we could move the closing date sooner. But closing date of 19 days from today is too soon because we don't even have an executed contract yet, for them to send paper work, my attorney review that could be another couple of days. I said let's go with March 12. We shall see.

super realtor, it's a combination of things. Tax, hold for appreciation, and cash flow.

We prefer to get a loan, if we get one, and assuming we can rent out 12 months of the year, we can cover the mortgage, insurance, property tax and HOA fees with rental itself and have about $300 left over. If we don't or have to incure major repairs (roofs, AC etc...) then it will be a wash. Even in that case it would still be a positive move by my calculations.

However, the bank is really trying to squeeze us on closing dates to make it impossible to get a loan, we might have to pay cash then refinance later.

Bank came back last night, agreed to price of 166K, but wants to close on 2/28!

That is 12 days from today and we don't have an executed contract. It might be tomorrow the earliest we have a contract then a long weekend! That gives me not even 10 days to do inspections and right now with no water no electric I don't know what's involved to get those turned on to do an inspection, plus I need to make sure my attorney shadow their's title work to not miss anything.

I countered 3/5 instead of 2/28. Why do they want such a rushed closing?

They will hustle to closing because you've made a cash offer. So, do you have the FNMA addendum? This is a Fannie Mae deal, correct?

Yes it is a Fannie Mae deal.

My original offer already has the Florida FR/BR contract, the HOA disclosure, the Fannie Mae addendum and it's lead based paint disclosure, plus a Chinese drywall disclosure.

As of right now they have agreed to my proposed closing date of March 6 so we have a tentative deal.

My agent said the LA will be sending her some verbage changes to my original contract and I need to modify the contract accordingly.

Meanwhile my agent has to leave town because of a family child birth, and my lawyer is off the rest of the week in Colorado skiing. OKAY!

My next move is to get the inspection done.

The question is whether I should drop the bomb of the illegal removal of a load bearing wall during the inspection and see if I can get some consideration from Fannie Mae out of it, or I should just keep my mouth shut.

I have already contacted the city and asked them of the "hypothetical situation" and how I need to remedy it. They told me I would be inheriting the illegal unpermitted work and have to file a new set of plans to reflect the current conditions, as well as rectify the structural deficiency. I am working with a contractor friend of mine to come up with a cost estimate. Filing a new set of plans is not a problem I am a PE and can sign and seal it.

Do you still want the house ?

Yes, but if I can get a some consideration for the problems it would be better.

Have a deal with the bank now verbally. I revised the contract and sent it on to my agent who sent to LA, now waiting for bank for final sign off which will make it into an executed contract. Monday is a holiday for them so won't hear back till Tuesday.

Trying to schedule inspection for next week. Still debating what to do about the unpermitted structural wall removal.

An update for those who may be curious how this deal ended.

Everything executed on my end. The day before closing, survey completed and the survey showed some discrepancy with the legal description on the warranty deed. There is a small error in the legal description and they can't deliver the title.

Apparently the error has been in the original deed since 1981 when the building was constructed. This error has been inherited in each subsequent sale and no one ever found (or care?)

So now the title company told us they have to REFORECLOSE the property to correct the error and it may be 3-6 months.