First potential Flip

[Shawn Pappas]

Hi im looking to make offer on first potential flip. This house is not on the market yet and I found it simply by writing letter to family. House is vacant and completely outdated, but structure, furnace, roof, windows are all good. It's a 2 bed 1 bath and needs lot of cosmetic work. Rest of houses in neighborhood are mostly 3 bed 1.5 bath. Plus this house was a home to probably 15 cats! What are some tips and strategies I could use with negotiating this deal. I want to make money but don't want to offer too low where I lose this deal. Anything I should be concerned about that I may not of thought of?

[Norman Wrensch]

The best answer I can offer is purchase price + rhab cost = 65% of after repair value. Much higher then that you won't have much left after paying your fees, interest and closing costs. I seems low but, once you run the numbers you only end up with 20-25% profit. Have fun.