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Updated about 8 years ago on . Most recent reply

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Jerry Ellis
  • Rantoul, IL
15
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The line between low ball and ridiculous

Jerry Ellis
  • Rantoul, IL
Posted

So I'm looking at properties and find a single family converted to a 2-unit. If I've interpreted the county's tax website correctly, it was sold in 2011 for $13k. Looks like it's been rehabed and the listing price is $64k. I need to confirm but I think the rents total $1100 per month, taxes are $932 per year, mortgage at $243 per month, and I'm estimating expenses at $517 per month including cap ex and maint. It cash flows better than a couple of different tri-plexes I was looking at for $40k less.

I don't have experience estimating the cost of a remodel so I don't have a feel for how much they have in it. I suppose I could go take a look at it and then go to Home Depot and estimate materials. 

Or, I could forget about trying to figure out how much they have in it and just make an offer. Would $50k be ridiculous?

~Jerry

Most Popular Reply

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Nick C.
  • Specialist
  • Tampa, FL
2,946
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Nick C.
  • Specialist
  • Tampa, FL
Replied

You hit the nail on the head in your last paragraph - forget about trying to figure out how much they have in it and just make an offer. Make an offer based on your numbers and what makes sense for you. Doesn't matter if they got the property for free and didn't do any rehab. 

On another note, I'd avoid the above strategy of wasting all the GC's time. Eventually you will need work done, and burning every GC around isn't going to help anyone.

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