Buying a property that's up for sale

[Nanette Miller]

I went to a property that's up for sale, it's been on the market for 55 days thus far, was recently reduced.  It needs quite a bit of work, I'd say 30K to 45K in renovations, the price is $299, the Realtor that was showing the property said seller is motivated.  I have researched the comps the price doesn't warrant $299K, I'd say $279K maybe.  Would it be fetch to have Realtor make an offer of $200K or $225K or should I take a contractor to the house and see what he'd estimate repairs and then deduct repairs and come up with a price?

[Marshall Downs]

@Nanette Miller

The answer depends on your level of comfort in construction estimating, but from the question, I'd suggest you bring a contractor along. Make sure it is a decent one with references and relevant experience. Also, is this a buy and hold or flip or other? The purchase price depends somewhat on your strategy, but I like the 70% rule or less for almost everything I do with properties. Pay no more than 70% of after repair value (ARV) for a property including rehab and holding costs. So, if the property is worth $300K ARV and needs $45K of rehab and holding, pay no more than $165K. Apologies if this was too elementary, but I wanted to cover all the bases.