Making an Offer

[Dawn Hall]

I am buying a property with my SD-IRA. The house I am interested in has a listing price of 60k. Top I can go is $51. Seller owns it outright and I am offerring cash and saying the seller can chose the closing date (she's an old lady with a lot of stuff in the house and may be in a rush but may want to stay through the holidays???). The house is definitely worth $60. But again, i can go above $51 So how to make an offer? Offer $49 or $50 and try to keep her down to $51. Or just best offer from the outset??? What would you do?

[Keith Saunders]

If you don't feel embarrassed by your offer its not low enough.

You can always go up but never down. You dont have alot of details about your deal so its hard for me to say exactly what you should do.

Whats the ARV?
How Much for repairs?
Fixing and flipping, buying and holding, wholesaling?
All should be answered before anyone can possibly give you any useful advise.

Here is the Formula I use to find my Maximum Offer Amount.

Example:
say the ARV is $100k
Repairs are $20K
40% for closing, holding, taxes, insurance, etc and profit (depending on your market this could be 30% or 35%)I use 40% to make sure I have a very good assignment deal any investor would want.
The most I would offer would be $40K, But I would start at $25K

or

$100K ARV
-$20K Repairs
-$40K 40% Profit and costs
=$40K Maximum Amount I Can Pay

The Numbers are what will tell you where you need to be on price NOT what you have to spend.

Again, this is just an example you will need to input your own numbers to get YOUR Maximum Amount you should pay.

Hope this helps