Fair Deal

[Robert Burns]

I have a purchase agreement on a property that I intend to assign to a rehab flipper. I calculated the approximate ARV, repairs (flooring & updates) and profit and ultimately the wholesale price including my assignment fee. ARV: $255 - $270k, repairs: $40,000, Assignment Fee: $10,000. My purchase price: $156k which makes my wholesale price: $166k.

I have a rehab flipper interested in the property and after further investigation it was revealed that the seller placed an insurance claim on the flooring loss due to water leak in the bathroom. A $16,000 insurance check is being held in the mortgage company escrow for the repair to be made. My seller would rather not repair the floors and have the insurance check reduce her principle at closing. My buyer wants her to reduce the price of the house since she is keeping the insurance money. However I priced the house without the flooring and offered it as an AS IS property so the quick math is ARV ($262.5k avg - Selling Price - Assignment Fee - Repairs - Holding/Closing = $51.5k profit. My buyer thinks she should reduce her price by 1/2 the insurance check amount ($8k). She is reluctant to do that as she thought the $156k was a very low price to begin with. I feel like my integrity is on the line because I negotiated the price of $156k as an AS IS price with the flooring work needed. I would appreciate any and all comments. Have a Great Day!