Made my first offer...which was rejected! Could I offer more?

[Matthew G.]

Hey everyone, I just made my first offer last week on a possible wholesale deal. I just thought I would ask for someone else to take a look at it to make sure I didn't offer too low, since it wasn't accepted.

I got the lead from my lead generating website (yay!). The property owner is the son, who just moved his mother to a nursing home. The house is owned free and clear. It needs a lot of updating, but seems to be in good condition structurally. He doesn't seem terribly motivated, but motivated enough to reach out to investors. He just retired, and isn’t sure if he wants to pay for all the repairs or just sell it.

My main issue is there are not a lot of good comps for 2/1s in the neighborhood, they are mostly 3/2s, and this house is smaller than the rest. Here are my comps:

Seller's House: 792sf, 2br 1bth

ARV Comps within the same neighborhood, last 5 months:

$94,500, 2br/1b 810 sf ($116/sf)

$82,000, 2br/1b 958 sf ($85/sf)

$96,000, 2br/1b, 1,272 sf ($75/sf)

There are a lot of 3/2 or 3/1 comps in the area in the $110k to $120k range. There are several cash deals in the area for 2/1s, although I think this house is in better shape looking at them (all 2/1s):

$45,049 792sf

$41,000 815sf

$52,000 1,128sf

$35,000 725sf

$69,000 888sf

$34,653 1036sf

I came up with an ARV of $83k. The second comp above is the oldest, and looking at the values for other fixed properties in the area I feel that's about right. With the limited number of comps, it's hard to tell though.

After figuring up costs to refinish floors, gut and update the bathroom, update the kitchen, and repaint interior/exterior, I estimate the repairs to be around 14k. I based this off figures from J Scott’s book.

$83k (ARV) * .70 - $14k - $3k (wholesale fee) = $41k

I made an offer at $41k, and the owner was hoping for $50-$60k. Can I go any higher on my offer?

I plan to follow up with the owner here in a week or two just to see how things are going. Thanks in advance!