We made our first offer - Tell us how we did

[Jordan A.]

My business partner and I (tried) to make our first offer today on a potential flip. We’ve only been looking for about a week and a half and this one hit the market right in our back yard. Here are the details:

House: 900sf 3 bed 1 bath on a crawl space with no garage

List Price: $90,000

Comps: $185,000

Reno: $40,000

Closing Costs: $12,000

Holding Costs: $6,000

Taxes: $6,000

We offered list price with 5 day inspection and 3 weeks to close. The problem is the price point, the thing was HOT. The realtor told us she had 5 offers all above list price, some of which were from other investors. If we had a little more experience, I would have felt comfortable going to war. However, given that we haven’t even gotten our company bank account set up yet (I know) we felt it best to bow out.

Given all of that, I would love to hear your feedback on the deal. Would you have taken it? How much would you have offered? Do you steer clear of bidding wars altogether? Any and all feedback is welcome. We want to learn as much as possible so feel free to tear this thing apart!

[Kevin Sobilo]

@Jordan A., if those were your numbers those were your numbers. I don't see how you could have gone higher than you offered and still made any worthwhile money with those numbers.

However, could those numbers be CHANGED?!?

For example could your scope of work be different and open up any other possibilities to make more money. It sounds like a ranch home, so could you have done a "pop top" and added a 2nd floor to it doubling the size. Maybe an $80k renovation could have gotten you to a $300k ARV in that way and justified paying over asking price.

A deal is what YOU make out of it not what is presented to you. The listing agent may advertise it as a potential straight forward flip but you're the one making the deal and need to see if there are other opportunities.