Lost a recent bid on a house. . . should I have bid more?

[John Rosselli]

Recently lost a bid for a house in Katy Tx. Mtg. pay off net = $53K, Est Rehab including holding and closing costs for 3-4 months = $38K, Est ARV based on recent actual comps sold within the same subdivision $120K - $125K at the max. Doing everything except foundation on this one. Home owner purchased another home. He now has 2 mortgages and massive repairs needed to bring old home up to market value. We offered $60K cash, he countered with $65K and a share in the profits if the final sale exceeded $120K. We countered with: Give us exclusive option on the home, we'll rehab it and split the profits whatever the final sales price. Another company came along and offered him $75K cash. I believe we could not have offered any more than what we did. How could the other company offer such a high amount? What could we have done different? We felt the margins were just too small.