Possible Fix and Flip Deal

[Denny Le]

Hi BP! 

I have been marketing through direct mail marketing and I finally have a motivated lead! The seller has a property that he bought from an auction for $147,000.00, but he didn't expect the property to have people living in it already. I asked him if they were squatters, and he said "Yes, that's the word for it!" I stopped by the property and noticed it definitely needs fixing up, from the roofing to the insides (saw through open windows).  The houses around the area are a lot nicer making it so this property can definitely gain some value. I just wanted to post on here to ask about how to structure the deal, so both the seller and I will win.

ARV: $205,000.00

Holding Fees, Buy and Sell Fees, etc.: $16,000.00 (this is an approximate guess)

Profit Wanted: $20,000.00

Repairs: My guess is around $20,000.00 (I will get a contractor/inspector to walk around with me if I can get a contract with the seller)

For now, does that mean I should offer the seller: $169,000.00 - repairs?

If this deal does get accepted, I will need to find private money lenders or hard money lenders, but with less than 20% down payment.

What do you guys think? 

Thanks in advance!

Denny