I could really use some advice on a real estate opportunity I'm considering. I have my eye on a house that's been on the market for a while, and it definitely needs some work before it can be rented out. The estimated cost of renovations is around $30k, but once it's all fixed up, the property value would likely increase to around $260k from the current asking price of $200k.
I'm having a hard time figuring out the right number to offer for the property. If I just renovate and rent it out, I know I would make a good return on my investment. But I don't want to overpay for the property, and I'm not sure what a fair offer would be.
I'm hoping some of you more experienced investors out there can offer me some guidance. How would you approach this deal? What factors should I be considering when coming up with an offer? Any advice would be greatly appreciated! Thank you in advance.
I am thinking doing getting 80% of the property value after renovation and subtracting the 30k.
Real Estate Agent · San Antonio, TX · Member since 2019 · 1k+ posts · 832 votes
3y
I would consider either the 80% ARV you listed or 70% ARV minus repairs. If the property has been on the market that long, the owner might accept it. If not, you can always speak with the agent to negotiate further.
Just make sure your numbers are good and give a buffer for unexpected issues.
I wish you all the best.
Let us know how things turn out! Excited to see the final pictures of the property!