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The house is in a less than desirable area. It was purchased in Sept 2014 for $380k and has been flipped.
They went on sale in Janurary at $649k.
In March, the price dropped to $639k.
I spoke with the listing agent at a open house on Sunday and she mentioned they haven't received any offers yet.
Though speculative, I believe the house is in a up and coming area. This is in Los Angeles and near a train stop that will eventually connect major parts of the city, downtown, Santa Monica, LAX, etc...
Thinking about offering $575k. I have 20% and have proof of qualified traditional financing.
Is that a low ball offer? Or, since the neighborhood is so / so, should I keep looking?
Comps are saying $575k is still a high offer, but this is a run down neighborhood and most of the houses need lots of work. This house has just been flipped, with a new roof, plumbing, electrical, etc...
Buy a house in the best location you can afford. You can improve your house, you can't improve a neighborhood. Come time to resell, it will make a BIG difference.
I think it's HIGH. Way high.
Why so much more than the price from 6 months ago?
OP said it was a flip. So someone bought it, fixed it up, and is re-selling it, that's why the price is higher.
To the OP: It's 90% of the original offer, so it's not really that much of a low-ball -- the question, of course, is if you are willing to go any higher. They will probably feel that it is an opening salvo in the negotiation process. To avoid time-consuming back-and-forth, if $575K is your top offer, you might want to make that clear on your offer.
Seems high......bot for 380; some (cheap) rehab work....maybe $50/sq ft?.....so if it is a 2500 sq ft home, add 125 to their purchase price; they want to make 25 for their effort/risk, so the "right" price might be somewhere in the neighborhood of 530.
Offer them 500 if YOU are willing to take the risk off of their shoulders; maybe be flexible up to 525.
They should be so lucky to find a well qualified buyer like you willing to take in the risk.
You better have the best inspector you can find! Flips are notorious for using cheapest quality and short-cuts. Not everyone is HGTV. I would not buy it but that's just me.
Are you interested in an investment or a house to live in?
So someone bought it, (allegedly) fixed it up, and is re-selling it...
To the OP: It's 90% of the original offer, so it's not really that much of a low-ball
Immaterial.
If it's a quality flip (highly doubtful) the questions about the breadth and depth
of the alleged "improvements" are what should dictate any subsequent decisions.
What was wrong with it at $380,000?
What, rather specifically, was done beyond cosmetics?
What is the real value of that work?
Giving EVERY benefit of doubt to the flipper...
I'll still say that $575 in this circumstance is high. WAY high.
Quote:
Originally Posted by riaelise
buying a flip in the ghetto based on potential is folly.
there's a reason why that price is sinking.
Based only on your description, I wouldn't touch it. You need to be extra wary when buying a house which has been rehabbed by a flipper. Oftentimes, they will cut corners just to make more money...and covering up problems is not unheard of.
The biggest negative is that you say it is in a run down neighborhood. You can fix a house, but you can't fix a neighborhood. You also said that according to the comps your price is high.
That said, I don't know LA and I especially don't know that neighborhood or the house. I just think that it calls for extreme caution. If you like run-down neighborhoods, why don't you buy a cheap house and fix it up yourself? It's better to be the flipper than the flippee.
Remember, it's far better to buy the worst house in a great neighborhood than it is to buy the best house in a bad neighborhood.
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