Hello everyone, newbie investor here!

[Matthew Wahlstrom]

I just got my license in Virginia in October. I am now in the process of getting my DC and MD license. My main goal from the beginning was to burry myself in the real estate investing side of the business. I am trying to avoid "some" of the new investor mistakes by constantly educating myself on all sides of the business. I believe that I have somewhat of a technical advantage because I already understand CAP rates, cash-on-cash returns, etc. etc. I also spend hours running very comprehensive CMA reports on properties to analyze their list factors, sold factors and the average percentages of their tax assessment value that they are selling for as well. I investigate high school ratings and average median income amounts as well as the percentages of rentals versus owner occupied in specific areas. Now that I have bored everyone with my background, I wanted to mention that I am currently working on purchasing my first flip. I found an absentee owner who is selling his rental property. After I called him, I found out that he is selling because he wants to build a house on some land he has, and doesn't want to deal with the rental property any longer. He bought the property in 2003 for $135,000 and has been renting it out every since. I called my buddy at a title company and asked him to run a search to check if the home was owned free and clear (which I assume it is). I just want to make sure that there are no liens before I move forward. The seller has the property priced at $226,100. Which anyone with more than a days worth of experience can tell that the house was obviously priced by a novice. Especially considering the home is roughly 900 square feet 2 bed, 1 bath and is sitting on 2 acres. Although there are not many recent comps in the area, there is one house across the street that is under contract for $175,000. It is a 3 bed, 2 bath on over an acre. I have played around with the numbers and typically use average CAP rates as well as the 70% rule, but my first round of numbers is saying that I should not be paying more than $100-120K for the property. This is definitely more of a flip than a wholesale deal, because there is some potential in the home. It also has endured some upgrades in the kitchen and window department. All in all, I have a few questions for the poor souls that have taken the time to read this long drawn out message.

1. Are there any other red flags that I should consider regardless of him accepting my offer?

2. Is a 900 sq ft. home on 2 acres a obvious awkward ratio of house to land?

3. Has anyone used any specific tactics, scripts etc to get a seller to accept an offer of more than $100K under their asking price? If so, what was the situation and how did it play out?

The reason I want to grab this house is because it is literally 5 minutes from my house, its small enough to manage with just me, my partner and my father, and the upgrades it needs are minimal.  

Knowing that the home owner has done an absolutely awful job of marketing the property (like I mean, not even putting one interior pic online), and considering he wants to move on and build a home, I feel like if I walked in with a check for $100K, he should be happy, not insulted.  I am still waiting to hear back from the title company about the homes mortgage status, but if the home is free and clear, I feel like that is even more of a reason to move on this!

Any thoughts, comments, questions and insults are welcome!

Best,