How much is good asking price for BRRRR method

[Kal Wol]

Hello awesome BPs

After pushed out from the competition, I am going to put an offer on distressed property in the hot area. The property has been sitting in the market for a while and it needs a lot of renovation - the internal of house needs all things to be changed. A rough estimate is around 80K.

The first question I have is, how much money shall be asked for BRRR strategy assuming the house is 100K asking price and it will require around 80K for rehab

Second is how do you estimate the rehab amount roughly. The above one is my own guestimate based on some generic research. The house needs pretty much all work inside the house. And not sure how long it will take to refinance and get the money as I am going to have it on conventional loan.

Thank you all.

[Russell Brazil]

Quote from @Matthew Paul:

If this property is in a hot area of Rockville and its been on the market for a while , something is very wrong 

 Theres only 11 houses on the market in Rockville over 30 days. Thats virtually nothing.

I Just looked at them briefly. 8 of them are overpriced. I didnt need to even check comps to know that. One is a couple hundred grand overpriced. Most are just moderatly overpriced.

One backs up to a major busy road, so those are always challenging to sell. One fronts a major busy road, so same story.

But people who think theyll be able to low ball a property thats sitting on the market because its overpriced are wasting their time. If its listed at $750k with an ARV of $600k, why in the world do they think a seller is going to take an offer of $420k?

Also homes that need rehab in Rockville dont sell for 70% of ARV. It's virtually impossible to flip there. It's one of the most desirable places in the DMV to live....as evidenced by the fact that only 11 houses made it to 30 days on market or more.

Rockville is so desirable that when you renovate in that city, you only recoup 80% of your reno cost. So literally every dollar you put in, you lose 20% of that dollar. People want to buy there, so theyll pay a lot of money even for a crap hole.

Op is wasting their time making a 70% arv offer on a house there.