Making 1st Offer today at 5pm (Any last minute coaching?PLEASE)

[Chris Mayfield]

House popped up in my neighborhood and young guy is wanting to sell quick. Dad passed away and he lives in the house but needs rehab. I don't want to miss anything and make a fair offer.

Scenario: Owes 132K. Houses in area .25 miles away have sold from 220-240K. Wholesle wise I was thinking of offering 138K.

Rehab wise would you hold it or being 1st possible deal just wholesale and be happy and build some income.

Thanks in advance!

[Justin Fraser]

Hi Chris,

How much rehab will the property need? Do you know the ARV of the house? Are the comps you are using similar enough and close enough in location? How did you come up with $138k?

Assuming the ARV is 220K based on your information, if an investor is looking at this deal using 70% rule, there may not be enough budget for a proper rehab. If the ARV is higher, this deal starts to look better.

70% rule is: ARV (220k) x 70% = $154K - Repairs = Investor Purchase price

If you're talking about a $138k purchase price, that only leaves about $16k for rehab. Will that be enough? If you wholesale it at $138k, the budget for rehab decreases even further.