Do I need to change my approach to finding deals?

[Scott Menkes]

I am analyzing another SFR in my area (Virginia Beach) that is an REO listed on the MLS that my realtor showed me. We would look at this property as either a flip (primary objective) or a buy and hold (back up plan). Some specifics: 3/2 ranch listed at 117K, with about 25K in repairs needed. ARV is between 175K to 190K (i am working with the Realtor to help better define). On the surface the property is very close to the 70% rule for a flip at the low end of the ARV and is close to the 1% rule for buy and hold for the all in of 117K plus 25K. However the expectation is that there will be multiply offers and could drive the price to 130K which than gets us outside the thumb rules which is why it is important to nail down the ARV.

I think our MOV could be 127,000 based on 80% of the max ARV (190K) minus the 25K in repairs. If the ARV is achievable we could walk away with 17-20K in profit after all is said and done.

The back up plan of buy and hold becomes less attractive and falls below the 1% rule 127K + 25K = 152,000.  We think the rent would be 1300 per month. 

Do we make an offer or keep looking?  Is the MOV of 127K too risky?  Should we be looking for deals else where such as finding a wholesaler in the VB area (which leads to our next series of questions of finding an experienced wholesaler in this area).

Not sure if this a good format for asking these questions but I look forward to the feedback from the knowledgeable community that is BP.