house #5!

Well, negotiations are over! After our 125 offer, the bank came back with 149 (asking was 154900 down from 167900). We took that as a strong sign so we came back at a solid 140, expecting another write-back splitting the difference. They accepted!! We just bought a triplex in decent shape for $14000! Unheard of. But totally awesome. Now of course we have to secure financing and get our inspection but I'm not expecting any surprises.

People ask why we offer low (like the 125) when we know it's not feasible. ALWAYS make a low first offer. Any sensible seller will at least write it back...they'd be foolish not to, even just writing it back at full asking to make a point. But by making a low offer you can get a real feel for where the seller is willing to go. For instance, in this case, if the bank was really eager to sell fast, they may have come closer to our 125 offer. By writing it back at 149 they made it clear that we needed to come up in order to buy it from them. But if we had offered 138 or something equally reasonable, we would have finished around 145 instead of 140.

Of course, there are some exceptions. Heck, we made a full asking offer on 31 Spadina. But in that case it was a turn-key property priced well below value. There were 6 other appointments the next day to see it. By making the full price offer with a 30-day closing period, it encouraged the seller to accept quickly and cancel the other viewings. But in my opinion that was still offering low since the house was undervalued.
Financing has gotten interesting too. I'm not sure we'll get a conventional mortgage for this one. We are right on the border of what CMHC will accept for our total debt ratio. But just when we thought we were toast, we learned about short-term seconds. But baby is calling so I'll discuss that another day!

house #5?

Well, the King St property was a total bust. We saw the rest of the interior and it needs thousands in repairs, and not minor stuff. We're talking plaster replacement, flooring, bathrooms. Yikes. He is going to lose the place...he owes 240K min and you'd be stupid to pay more than 180 in its current condition. Poor old house. Maybe someday the bank will own it and let us make a reasonable offer but until then it's off the radar.

However, we are putting an offer in on another project, which has already been taken by the bank! Its directly across the street from the one we own on Spadina. 2/3 vacant, needs lots of lipstick. But it has new roof, windows, and furnace. It needs a new fire escape though, which will run in the neighborhood of $10000.

But here's the fun part. We have offered only 125K for it, we expect to finish around 140. It will EASILY appraise for 210 and if we re-fi for that we could pocket 42K in cash.

I love bank sales.