Went For It !

[Kevin Pfeiffer]

Made an offer on a place this week. I'm newer to REI. Intend to rehab/resell the home. SFH. Bank owned and sign went in yard on Tuesday. Got ahold of the bank and walked through on Wednesday. Made offer a couple of hours later. Reply to the offer was "not accepted." I made a second offer right after that and never heard back. The next day a realtor sign shows up in the yard. Guess my offer wasn't good enough....LOL ! Appraised for 37K, they listed for 37K, my first offer was 10K, 2nd was 15K. Rehab estimate is 22K. Value when complete is about 55-65K. Purchase, hold, and sell costs are about 7K. The banker already told me that they want to get rid of it so I don't think they have that much in it....was bought for 30K in 1998 so think they have gotten their money out of it. What do you guys think of my numbers? Any advice ? I am not afraid of going for it and getting rejected but the numbers work for this place and it's in the location that I like. I'm going to keep pile driving them with offers going up slightly to my cap until they relent or I stop ! This stuff is fun ! Do you think I offered WAY TOO LOW ?

[Rick Baggenstoss]

Assuming ARV is $55k less $22k rehab - $7k - $15k = $11k profit

Are you happy with $11k profit/equity?

If your offer is within range, banks will negotiate vs. reject the offer. Sounds like you're in range on the second offer. Volume is not the solution.

It sometimes helps to provide some details as to why your offer is what it is when it's way off of their asking price. They have to document why they accept it. Your pictures, estimates, and calculations are part of the justification. Help them help you.

It's great experience to go thru this exercise. Firm up your rehab numbers and your ARV to firm up your profit. The only sure thing about an estimate is .... that it's wrong.

Good job on the first step.

Rick