Problems Worth Having...

[Walter Key]

So as everyone else is probably sitting at home with their lovely brides or their mothers, I'm away from both. So, to maximize my time away I'm being proactive and looking over all the sites I typically check for potential deals. Low and behold...a new listing! A 4 Bedroom, 2 Bathroom, VA Foreclosure that just hit the street. Asking price...$36,500. Needs a full rehab. Estimated rehab...$50K-$55K? I have my Realtor tapped to get the contractor over to it tomorrow for an estimate since I'm out of pocket at the moment. But...ARV...$135K-$140K! My Realtor actually just had a listing right down the road go under contract in one week of listing, with five offers. It's a 3/2...under contract for $130K. She's sold probably 1/2 a dozen homes in this neighborhood in the last 6 months. Great little spot.

So on to my problem..."Bring your highest and best by 9AM on Tuesday". Ugg...I don't want to wait until Tuesday to let everyone that's not actively searching for this deal to have time to find it tomorrow and be in on the bidding war! :( To add to my problem, I'm conflicted as to what offer to make. Due I want to offer more than the asking price considering it looks like the profit margin has plenty of room? I expect this property will be on multiple investors’ RADAR come Tuesday morning. What are THEY going to offer I wonder? Can they get the rehab done for less than I can? These are the questions that I sit and ponder as I type. In the grand scheme of things, I suppose this is a problem worth having. :)

For those that have found themselves in a similar situation before, what kind of offer did you present? More than asking? Full asking? What incentives (at this price EVERYONE is going to be a cash player) can I offer to sweeten my deal?

Happy Mother's Day everyone!

[J Scott]

I've been in this situation hundreds of time.  I always do the same thing:

I analyze the deal using my numbers and my desired profit target, I get my highest-and-best offer, and I make that offer.  

This isn't a situation where you are likely to have negotiating power, so don't bother trying.  Put together your best offer and submit it.  If it's over list price (it probably should be), so be it.  List price is meaningless...