Motivated Seller in Washington DC

[Kelsen J.]

Hi BP,

A motivated seller called me because he received one of my yellow letters in the mail. He has a 3bd/1.5 bath single family house in Eckington NE Washington, DC. I went to take a look at the property. Here is the numbers:

ARV: $450,000

Repairs Estimate: $70,000+

My Offer Price: $223,000

Hard Money Loan: $292,500

(I plan to take out a hard money loan to cover purchase and repairs...65% LTV.)

Estimated Profit: $157,000 (before closing costs & other fees)

The seller thinks that my offer is too low. He is asking $400,000 which is obviously ridiculous considering how much work the house needs. I figure that the highest I can offer is $230,000. Another house on the next block with the same floorplan, size, style etc. was purchased for $226,000 and sold for $500,000 after repairs.

The seller said that he is calling other buyers for the best offer. Is my offer to low? Is my numbers correct? I can't imagine offering above $230,000.

Any help would be appreciated! Thanks!