New Financial Route

This Friday was the big day — the day of the closing for the triplex. The process was quick enough (although it doesn’t help with you’re 40 minutes late)! Like I mentioned, I will have all the purchase details for this property and pictures soon. I agreed to give the current owners time to get all of their belongings and for the current tenant to move.

The previous owners had a ton of stuff in the property — they had owned it for nearly 40 years and lived there themselves at some point. When I was there earlier today, they were still there removing belongings. So I will wait a bit longer to really go in there and make moves :).

On the other hand, I did want to talk briefly about another deal that I have under contract. Yes, that’s right. Property #2 is already down the pipeline. This property is a single-family home this time.

The story of how I got this house is a bit interesting. It had been on the market on and off for about a year and a half. It is located in a fairly desirable neighborhood at a price that was well below other houses in the area.

The house had some drawbacks that were clear from the listing photos. It was a dreaded 3 bedroom 1 bathroom property, common many years ago but now seen as undesirable and obsolete due to the need to share one bathroom. The property had radiator heating and no air conditioning. It also did not have a garage, which is a common feature for other houses in the neighborhood. And these issues are all on top of the fact that the house hadn’t looked like it had been updated in nearly 40 years.

I had been eyeing it for a while, and decided to schedule a tour of it with my realtor after one of many price cuts.

As soon as we walked inside, I realized why it had been on the market for so long. The floors were lopsided and bent, and the walls were cracked and worn. The most concerning issue, though, was the bent foundation wall in the basement (it also didn’t help that the basement was not full). That was probably scaring most buyers away,

To be honest, the foundation issues made me a bit wary. I had always heard about how repairs for foundation problems can be a nightmare and extremely costly. But I also saw a lot of potential in the house. There were high 9 feet high ceilings throughout. The kitchen was decently sized, and there was a laundry room on the first floor. I could see how I could make the house amazing.

Still, I knew I could not offer close to the listing price due to the amount of work the house needed. My first offer was about 70% of asking price. The seller responded by only going slightly below asking and I countered again with an offer about 15% higher. The seller’s agent then responded with another counter that was still only a few thousand dollars lower and mentioned that the seller would not go lower than that.

At that point, I told my realtor that I would think about their counteroffer but kept looking at other properties, still not convinced that their price was low enough to account for the renovation costs. I eventually found and went under contract for the triplex, but also noticed that the house was still on the market, with yet another recent price cut.

Even with the triplex soon to be under my belt, I still felt like there could be an opportunity to secure a deal. I asked my realtor to see if they were willing to accept my previous counteroffer since the house was still not under contract. At first, I got a negative response from the seller’s agent.

But a few days later, the sellers agreed to my offer price if I waived contingencies. This is typically seen as a risky move, but it’s honestly not as scary as it sounds. For fixer-uppers, the plan is to typically replace almost everything anyway so the current condition doesn’t matter much. Not having an inspection contingency is therefore not a problem.

An appraisal contingency wouldn’t make much of a difference either since I made my offer based on nearby comps.

The only contingency we left in the offer letter was financing since I was going to use a conventional loan. The sellers originally wanted cash, but we managed to convince them that I could get the deal done with a mortgage.

I signed the updated offer letter when my realtor sent it to me that night and the rest is history! I will have more details on this purchase after closing.