First SFR Buy and Hold Deal - Highest and Best

[Jordan L.]

Hello BP!

It has been a long journey to this point, but I've finally gotten to the stage of putting in offers. I'm looking in SC for a buy and hold, cash flowing SFR rental. I've been putting in lowball offers on bank owned MLS properties.

I've gotten a response from one of the banks! This particular property is a VA owned home, listed for just a couple of weeks at 100k. I offered 64k cash last week, no contingencies. The bank has come back asking for highest and best, as there is one other offer on the property. Apparently the listing agent slipped and told my agent that the other offer is also, coincidentally, 64k.

So here's my question: what should I go in with as my highest and best offer? The property is worth (conservatively) about 130k, and would rent for about $1150/mo. Using the 50% rule, my monthly expenses will be $575 (including taxes and insurance, right?), leaving $575/mo for P&I if I want only to break even. Obviously, I want to keep P&I much lower than that.

What would your highest and best be on this property?

Also, has anyone ever put in an offer with the following strategy: I will offer $500 more than any other offer up to $xx? I've heard of this being used in the past but have no experience with this type of offer myself.

Thank you all!

Jordan in CA