What to offer on a property that needs total remodel?

[Rebecca B.]

Newbie wholesaler here!

I want to make my first offer on a property I’m walking today. Property is an estate sale, it’s in a good location where comps are around $300k. Property has been on the market for months and they are asking $105. House is boarded up so all I can see is the outside, but it needs a complete remodel.

What kind of offer should I make?

Is there a specific formula you would use to calculate what the offer?

Would I need to get an contractor estimate before offering this to cash buyers?

[Yoann Dorat]

@Rebecca B. Hard to say without knowing how much rehab is needed but as a general rule of thumb:

If ARV is lower than 250k: 55% ARV minus repairs

If ARV is higher than 250k: 70% ARV minus repairs

Of course this method may vary depending of the market but it’s a start ;)

Good luck !