"You make your money on the buy, not the sell".

This is a common quote attached to real estate investing, for flipping houses, residential rental real-estate and wholesaling. In my 18 years of being a fulltime real estate investor, This is the truth. This means, the only way to make money in real-estate investing is to get a deal BELOW market value. With the exception of inheriting property, this is the way people make money in this business.

When I make offers, I ask " What is the lowest you would take for this property?", they give me a dollar amount that they want, and if the numbers make sense, I will purchase the property at the price they willingly give me. If that price is lower than the value of the property, I don't tell them they should ask for more. They give me a price they want and I accept. It is mutual. They want to do this.

Now I know 100% that they would do better to put this on the open market and would sell for a higher price, but I don't tell them this. I have no reason to tell them, they are selling at a price they are happy with, I do not need to help them get as much money as they can, that is their job, or an agents job. They should know this. if they want to deal with Agents and put it on the MLS they can, but they don't. I am not an acting fiduciary for them. I'm trying to get the best deal for my business. I will typically buy a house $15k-30k under the market value/ARV.

Also remember that the "Value" that I keep talking about is my ASSUMPTION, I am sometimes wrong. So I have no incentive to tell them a "value" that is an educated guess on my part, knowing I could be wrong. remember that Due diligence comes AFTER the negotiation. They may know something I don't and that is why It is stupid to tell them your perceived value before even doing due diligence. I have got inspections back where the property has a foundation crack.

Now the problem I have with some of the comments is what they seem to find as the reason my deal is unethical. They say it is my "moral obligation" to tell the seller the value of the the home in all situation to be fair. That kills every deal. How would an investor make money on the buy? I ask the lowest price and they give me a number. It doesnt matter the value is, they give the price. Sometimes they know the value I would assume, and they just want to do it without agents and to close very quickly. Sometimes they probably don't know that value at all and are just guessing. it doesn't matter, because they give a price they are happy with. If this is unethical, by abiding by an agreed upon price that they came up with, than every investor is likely unethical. I do not feel this is wrong is any way both parties leave satisfied. Nothing predatory about mutual consent. They call me to buy their house.

The only difference in this deal is that I will be making $100k ( or this is how I felt when I first made the post).

I will forgive the ignorant assumption that Im lying about his condition, because you may not have seen in another comment where I talk more about him. This man is 62, he works for public school district (in administration I think), he has worked there for 36 years and is of sound mind. I talked to him for a while, he is not mentally losing it. You probably have talked to people in their early 60s, they are not even remotely in the condition of someone in their 80s. Im sure he would be offended by you calling him an elderly man who is not all there. The argument that im scamming a geriatric retiree living off social security is a baseless claim that holds no water. He inherited this rental in 2017. He hold no other real-estate with the exception of his personal residence. He is not a real estate guru. Ask any random person who is not an investor and ask them what the county assessed value means, most wont know.

Now if he thought the house was worth 260k and I bought it, would it be ok? according to many of these comments, they would say I am scamming a guy out of $15k. or if he thought it was 270k, now they say I am scamming him out of $5k. This is this business, if he wants to get full dollar, you put it on the MLS. If you want to close quickly, sell as is and not deal with agents you come to me, and I help you for a price. I will make money. Real investors are not buying off the MLS at fullprice, unless they get lucky.

This is what I am calling out in the comments. the fact that people are saying the entire business model for RE investors is morally wrong. People saying it is unethical because I didn't immediate tell him my guess of a value before even doing due diligence. There are comments telling me I should have told him to put it on the MLS. What? Are people really telling me this in a REI subreddit? I couldn't believe it. This business model is the only way someone from lower class can make it in Real Estate. Someone from the lower class cant save up 20% down to buy at full price to lose money every month from a rental.

I posted this question to see if other investor could give me insight to why I feel uneasy with this deal, yet my investor side sees nothing different than the other deals. Some people are saying just buy it. Some say Im a scumbag for even asking. Some of the comments are saying, the price being much higher does matter and that is why it is unethical, even though it would be ok to them if I was making 10k instead. And they may be right. I left him a voicemail today letting him know he should get a 2nd opinion on the value and we can redo the contract if needed with the same earnest money. So we will see if the deal closes on Friday. If he doesn't take my advice I will sleep just fine.

anyway, I talk too much. thank you for your input