Atlanta - maximum offer price: Buy/Hold vs. Flip

[Rush Wall]

I am always trying to improve my property valuations and was interested to hear from others how they were arriving at their maximum offer price. I know that there is more than one way to skin a cat and would appreciate any input on the topic. Thanks.

[Rick Baggenstoss]

Hi Rush - Everyone's got their own trick.  Here are a couple of approaches for you to choose from:

1.  Max offer =  Desired Total Profit + Rehab + Buy/Sell Costs + Hold Costs

where desired total profit considers any wholesale profit and rehabber's profit AND risk (time, rehab, location, etc.)

2.  Whatever will win with reasonable profit = $5k wholesale profit + 20% rehabber profit margin + all other costs listed above.  

Tweak your numbers so you don't bid in round numbers, e.g. $40k might lose, while $40,250 can win you the deal.