All Forum Posts by: Kelsen J.

@Barton Wallace Thanks for responding! My friend who is also an investor also suggested that I wholesale it instead of buying. Its better to get something than nothing.

Interesting! I will try that formula the next time I get a lead. I don't that the seller is motivated. I called him again to negotiate but he isn't answering the phone.

@Bill Jacobsen Thanks for sharing! What formula do you use?

@Simon Campbell I am familiar with the wholesaling formula. I am more interested in rehabbing the property myself. I can get approved for a hard money loan. I want to make sure that my offer is reasonable enough to fit my loan request.

@Arktavious 

Good point!! I don't think that he is motivated. My mom (my consultant..lol) said the same thing! I am going to let him think a little bit and give him one more call tomorrow. If he doesn't respond then I will move on. I refuse to go over $230k

I used 4 comps to calculate the ARV but I referenced the $500k comp as the basis for my offer price.

Also, I forgot to mention that he bought the house for $168,000 in 2008. I think my offer covers his mortgage and gives him extra money on the side considering the condition of the house.

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!

Hi BP,

A motivated seller called me because he received one of my marketing 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!

Thanks @Tapan Trivedi and everyone else for your advice! I will keep you updated!

Thanks @Rodney Kuhl that sounds alot easier!

@Dev Horn I hand address the envelope and type the letters. But I don't individually type the letters each time. I just change the name and address but I'd like to find a faster way to standardize the letters. Eventually I want to start doing post cards instead but for now i want to focus on YLs