How low is too low to offer

[Collin Smith]

I am closing on a HELOC next week on my primary home with the purpose of using to buy another property. I am looking at a bank owned house for $70000, but i don't want to pay that much. It needs about 20000 of work to make it great for the area. I am up in the air on if I want to flip or buy and hold. I am wanting to offer 40000 to start, just to see. Is this tip if it is it worth it to find a starting point. I am trying to figure out how much was still owed on it, but I am struggling to find the info. My uncle told me that his business partner for a flip said that banks look to get 70% of what is owed, is that true?

[Ryan Murdock]

I don't think there is any consistent method to determine what one bank will take over another bank. Once you think you have it figured out the next deal will completely baffle you and go against whatever you thought you knew.

With a low offer you really only risk someone else swooping in and offering more than you and you lose the property. If you can live with yourself if that happens, great, start lower...it's almost always easier to raise your offer later than it will be to lower it (although there are ways to tie it up quickly with a high offer and then renegotiate the price during the due diligence phase, although that's an entirely different thread...)

If you absolutely "must have" this property don't mess around with a super lowball offer and go with something higher. All depends on your motivation to own it and what you think your competition (other buyers, if any) will be offering.