First call from yellow letters

[Darren Nichols]

So I got my first call today from letters I sent yesterday. The call was from an expired listing and it was listed at 109k but the home value is 140k. I am having trouble getting comps online so I am waiting for my real estate buddy to email me back. In all honesty if the guy is motivated and I know there are a lot of factors such as if the house needs repairs or not is there actually a potential for me to make money on this home?

[Dave Savage]

Quick Analysis For you

ARV $140k * 70% = $98k (search for 70% rule in the forums, it is a good rule of thumb to cover carrying costs, acquisition costs, and rehab profit)

Always assume minimum $10k in repairs unless seller tells you it needs more (roof, siding, etc) = $88k

Profit you want to make - ~$5k = $83k

You need to get it for $83k or less as a very rough estimate.

Ask the seller what they would take for a cash offer today, if they won't give you a number I would give them a range $75-80k to see if they express any interest before driving out to the house. If they are sticking to $109k or more move on to the next one.

A key though will be to follow up with them every few weeks to re-express interest - they may become motivated months from now and you don't want to lose a potential deal