Finally made an offer!

[Jeff Zamora]

Hi fellow BPers!

After months of looking in So Cal, networking and reading/learning and encouragement from BP I finally took action and made an offer! An investor-friendly agent found a repo posted to market at $90K, probably requires $20-35K in rehab depending on how far I want to go. Cheapest house in area is selling for $200K. This house ARV is probably conservative $220K. Spending a little more on windows to replicate charming cottage look will likely yield a little more on ARV.

Here's the details of the transaction so far:

1. day 1: property hits MLS at 1PM

2. day 1: drive by property at 2PM, schedule viewing at 3PM. 3PM-5PM review property, put in offer of $103K by 9PM. Cash offer, contingent on inspection. My first ever cash offer too!

3. day 2: agent cannot reach listing agent until 4PM. Listing agent says multiple offers in, several higher than mine. Also states that bank is not going to do final 'best and highest offer' round and will just stop taking offers 5PM day 2.

4. day 2: 4:55 PM, submit updated offer of $125K. Given that I want to buy and hold this property conservative rents, rehab etc, this is the max comfortable amount to bid. I am not really wanting to bid/value on possible appreciation in this case, so based the max offer on rents.

I will likely not get this property as there are probably some contractor types that have a) put in cash offers with no contingencies (not even inspection) b) are willing to pay more because they can flip and are willing to take less profit. If a contractor paid 140K, did the updates for 20K, they could still make 30-40K on the deal.

I also learned that I can do a cash out refi pretty easily for amount paid according to my direct lender.

So, my questions for BP:

1. Based on the above was I too conservative?

2. For so cal offers should I always just start with best offer?

3. Does the idea of just having my contractor view property with me or working some deal with a home inspector make sense so that I can offer with no inspection contingency?

Thanks for any feedback!

Jeff