Hawaii-Bound Through Downsizing?

I, through our real estate LLC, made an offer on a single-family home about five miles from where we currently live, in the same city. It all started when I was getting my hair done last Tuesday. My stylist and his partner purchased a duplex back in December and it is just a couple of blocks from this new potential property. When I’m in the salon, we love talking about real estate and small-business ownership. I’m so proud of my stylist for purchasing a duplex for his first property. We’ve discussed, at length, the benefits of owning and renting real estate. So, last week, he was telling me about this great little house that is for sale in his new neighborhood. We looked it up online. I sent an email request to the seller’s agent (I have two real estate agents that I use, but thought I’d try no agent this time). I met the seller’s agent at the property on Thursday afternoon. Mr. PFL and I drove by on Saturday evening so he could get a feel for the neighborhood and location. And, today, I emailed a cash offer of $60,000 on a list price of $110,000. We’ll see what they say.

Now, this offer really isn’t as ridiculous as it might seem at first. The home was built in 1925 and updated sometime in the 1970’s or 1980’s and never again. The electric was probably replaced about the same time. The furnace and air conditioner are newer. The outside looks great, with siding and a newer roof. But, there is wood paneling in most of the rooms. Light blue laminate counter tops. A brick surround, and carpet, in the upstairs bathroom. Basically, every single room needs work and to be updated. The $110,000 list price is totally fair, and probably under market value, if the house had been updated in the last ten years. It might even fetch $125,000 or so. But there is no way it is worth $110,000 in the current condition. It is being marketed as move-in ready, but I wouldn’t even want to advertise for renters in the current state. The house is part of a probate estate, too. Thus, my offer of $60,000.

If we get this house for $60,000, we could spend the next few months fixing it up. I think we are both ready for another renovation project and manual labor can be good for the soul. We can utilize all of our skills, and learn some new ones, like refinishing the wood floors. We could then either sell it, rent it out, or rent it to ourselves. If we decide to live there, we will need to do some serious downsizing, which we want to do anyway. We would also be in a better position to get a roommate in this smaller house than our current one as the main floor has a private bedroom/bath and the second floor has two bedrooms and one bath. We wouldn’t even be on the same floor as our roommate. We’d need to add a bathroom to our current home to have that flexibility. We would also feel better about selling our current home, I think, because we would still have a home, with plenty of storage, and in a neat part of town.

And, this week, at least, Mr. PFL and I are convinced that we can downsize, sell our current house, gets some cash, and then move to Hawaii. So, I’m keeping my fingers crossed that they will accept or make a counter-offer that we can entertain.

UPDATE as of 4:25 p.m.: The lowest price the seller will accept is $100,000, so no deal for now. I’ll keep an eye on it; she might change her mind in a few months.

UPDATE on 3/18/2915: The listing price was reduced to $105,000 yesterday.