[Calc Review] This deal looks pretty good to me!

[Andrew Bondarchuk]

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I've found a foreclosure in an area that is booming and I believe there will be a lot of interest in this property because of it. This is listed at $51k but comps in the area are valued at $150k. For rental income, there is a home exactly like this one that's renting at $1/sq. ft. so I feel good about $1k/mo. for estimated rent, especially given that the space is so small and the structure seems very good, so I don't anticipate that there will be a lot of structural work to do. I'm estimating $25k in repairs to account for new appliances as well as installing central air (kind of a non-negotiable here in FL). The calculator is showing me that it's less than $80k all in and will cash flow for $500+/mo. I feel very good about this and I want to make an offer, but I've never done that before, so I have some questions.

1) Do I literally just e-mail the listing agent and say "I want to make an offer"? Because the numbers look so good I want to offer full asking price so I have an edge against some other buyers. 

2) If they accept, then what? Am I on the hook for anything at this point? Do I have to have ink to paper to even make the offer in the first place, or put down any earnest money?

3) If I am unable to find someone to help finance the deal, do I just walk away?

They are accepting offers until tomorrow (5/6) at noon and it has only been listed for 4 days. Any and all guidance and feedback is welcome and appreciated!!

[Tim Herman]

@Andrew Bondarchuk First things first. Get an agent and look at the property. What if there are foundation issues or black mold your $25000 budget wouldn't cover those issues. You are using WAG (wild *** guess) numbers. Do you have an approval letter from a lender? Down payment? If not the seller will not consider your offer. Once you make an offer you will put earnest money down subject to financing. If you cannot get financing you get your earnest money back. If you walk away and don't try to get financing you lose your earnest money. Hopefully you realize people can offer more than the asking price. Now back to your report. You have no financing in your calculations. How are you going to finance the rehab. You have no CAPEX (capital expenditures) 10%. It is all in the numbers.