Another Home - Highest & Best

[Elliot Larkin]

Looking to purchase my second home in cash (foreclosure) which I will hold for some time as a rental. It is a 3/1.5 with 1250 sq ft and a HUGE detached work space (shed) (making the property unique). Also it is about 80 yards off of a state highway (you can hear the traffic from the front yard but not so bad from the backyard), any thoughts on this? ARV is looking like $110,000-120,000.

Asking price is $64,900, the bank is asking for highest and best offer between myself and another buyer. My initial bid was $63,000, (it is priced to sell) and this was lower than the other bid. I am trying to decide what to counter with as my 'highest and best'. 

To get it nice and rental ready looking at $18,000 in rehabbing…total investment of $85,000 at the asking price with closing costs and holding costs during rehab.

It looks like it will rent for $1,100-$1,150 monthly = $13,200 annually

Operating costs include:

Taxes: $2000

Insurance: $800

Maintenance & CapEx: $1,600

Property management (myself) at 10%: $1,320

Vacancy (1 month rent): $1,100

Has anyone been in these highest and best situations before? Would an offer of $69,000 (making a total investment of $89,000) be too high or low? Any input would be great!

Elliot