Would you come up on this offer?

[Douglas Curtiss]

A realtor I know recently brought me a prospect for a flip.  Details are this:

1900 sqft 3/2 SFR in Gila Bend, currently on market for $74k.  He came to me and said it's currently occupied and would make a great clean-up and with "only some minor fix-up and a vacant home we could resell around $100k." The CMA he attached showed:

Price by sq ft - $146, 250 ( low $34,778, high $239,598)

Price by FCV ration $96,866 ( low $46, 610, high $174,176)

Part of the issue is it is occupied and so until the tenants are out, they are unsure of the inside condition (it's also why they may have had issues selling it on the MLS).

I ran the numbers on the fix and flip calculator and came with the following:

Resale Value $100,000

Purchase closing costs -$2000

RE Agt fees for sale -$6,000

Sales closing costs -$3000

Monthly holding costs - $3000 (assumes 6mo holding at $500 per month)

Rehab -$5,000

Desired Profit $20,000

Offer Price $61,000

He then basically dismissed me (obviously too low for him to offer).  

Back-story for this property.  I am pretty sure the owner obtained it by tax lien foreclosure.  That is why the tenant is in place.  Also means the current owner has a very low cost basis for the house and should have room to come down.