OfflineHello DG Family, I'm new to real estate investing, I have been reading Deans books for about 45 days now, I have some adds out for buyers to build my buyers list. The area I am looking for assistance in is I found a 2 unit duplex brand new no one has ever lived in them, the person that was building them moved out of state, so how do you determine FMV on a new unit and would you be able to get the 20% to 40% discount. He has already discounted the property 10-11% but the yard work is still left to be done. Could someone give me some advice please.
Thanks,
Keith
__________________
Your discount should be based on the FMV. Although you say the owner has already discounted 10-11%, that is only discounted from his original list price. Most often the list price is above FMV.
I would compare comps and adjust for added features and deduct for additional work to complete. So determine FMV and deduct the desired discount. Then deduct the cost of finishing and arrive at your offer price.
Being new does not always necessarly mean it's better quality.
If you are going after a duplex and there are not many others similar to this property in the area, you might consider using a more reliable method. The more reliable method would be an income approach, because if you can get an estimate of the going rent amount for properties or units similar to yours. It will be a lot easier to see if you can obtain financing for it, as lenders use this same approach and other buyers of the property if you are going that way.
Here is a link to how to use the income approach
http://www.invest-2win.com/IncomeApproach.htm
If you would like the chance to work with me or one of my fellow real estate investor coaches and our advanced training programs, give us a call anytime to see if Dean's Real Estate Success Academy and our customized curriculum is a fit for you. Call us at 1-877-219-1474 ext. 125