How can I make sure my offer is attractive?

[Andrew P.]

I am putting in my first offer on a house rehab. The asking price is $250k and the ARV is $520k. Total repairs of around $150k. Holding costs at $20k. There is a lot of competition on this house. I am sure someone is going to make a cash offer that is attractive. Unfortunately I am not in the position to offer cash. I am going to put in an offer around $300k with no concessions but it will have an inspection clause and 7 day due diligence. Any advice? I'm very new to this so if I'm missing something major please let me know. Thanks

[Brian Pulaski]

Maybe I am reading your numbers wrong? I assume this is a flip that you will resell, correct?

$520,000 ARV

- closing on the sale end is probably $35,000.

- closing on the buy end end, maybe $5000.

- your offer of $300,000.

- your holding costs of $20,000.

- your rehab costs of $150,000.

Unless I am missing other reasons you won't have these costs, I see you barely making any profit ($10,000). After taxes, maybe $6000. Is this house worth a tiny to zero profit? That would concern me more than how to make your $300k offer stick.