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Updated over 10 years ago,
Making an offer to Seller
Hello BP Family, I have a situation here and I want your input. I found this house and I spoke to the owner. Basically, the house is occupied by the owners relative. The current ARV for the house is going for like $550K. I saw the house and did a walk thru. To my amazement I would have to say "hoarder galore". The place is a sham and seems like the owner build additional rooms and bathroom to make room for renters, which are not being used. We are talking about 5 bedrooms and 3 baths in 1800 SF home built in 1969. Central Air and Heating has stopped working for 5 years now, stairs are damaged and about to fall apart. Kitchen is half gone utilizing cabinets from IKEA. Bathroom are old and outdated. The pool in the backyard is cracked all over inside and the surrounding area itself. Everything is so old, which makes it perfect for a good flip.
Basically, when I spoke to the owner again. She said "Did my house scare you?". My response is no, but I think it would really need some major work to get it up to where you think you would want to sell the house for. The owner indicated that homes around the area ranges between 520 to 550K. Which i can agree.
Usually, when dealing with a sellers I wait for them til they inform me about how much they are willing to sell. But this owner indicated they she wants to figure out her value and get back to me. She is aware that it may cost a lot just fix up. Now with that being said, we are playing the waiting game and she still has not determined the value of her house.
So, my question is should I gather up some comps with images and show her homes that are priced correctly with amenities up to date so she can be aware how much her home is really worth if it is fixed up. Because automatically I think we would need to spend like 100K just to fix it up. I even want to tell her how much we are willing to offer her for the house. But from my understanding we should always wait. Should I break this rule and just make an offer using the 70% ARV minus repair rule.