Making an offer on a flip

[Ryan R.]

I had a question on making an offer on a flip. I'm putting dummy numbers just for the purpose of the question, but please let me know if the numbers are wayy off. Let's say you get the house appraised for $300k and when you're close to make an offer, you realize you want to change the roof, which is not necessary. Let's say the roof will cost $80k. Do you simply take $80k out of the offer price or a portion of it, since ARV will likely be higher? Would love to hear your approach on how you would adjust your offer

[Corby Goade]

Welcome @Ryan R.- First- assuming you are just truly using "dummy" numbers, but a roof shouldn't cost you anywhere near $80k. Secondly- a roof isn't really a "value add" meaning, a roof that doesn't leak does not really add to the ARV, people expect a roof to not leak. There's a difference between an upgrade or a perk that makes the property nicer and will command a higher ARV or rent. For example: formica countertops work just fine and they'll do the job- but, where appropriate, if you use quartz countertops, that will add value to the home because it's an upgrade.

Best of luck out there!