My wife found a 3/2 FSBO as the owner was putting the sign out in the yard. I did my research and feel like ARV is $240k but asking is $250k.
We looked at the house today and we were the first folks to see it. It needs updating as it still has original finish outs from 1970. Using J Scotts MPP method my calculation resulted in a max offer of 185k.
The owner was a nice lady who said they bought it 18 months ago for their son who now is moving. They just want to cash out. I told her that I didn't think she could get full retail but she was confident that they could. I know they paid $180k in cash so my offer of $185k would definitely be low given the appreciation thats happened in the last 18 months.
So what did I do? I chickened out. I didn't give her in offer. I told her I will call her back in a few days to see if they've got what they want and if not I would have an offer. I didn't want to insult her. Clearly they're not distressed sellers and think they could get full retail. And they might. Inventory is so low that someone might think this is a good choice for them.
The stinky part about being a newbie with a family and a lot to lose is that you are unsure off everything. I have no idea if my ARV or rehab estimate are right. So I went conservative but did I go too far? And then I didn't have the courage to insult a little old lady who might have not been insulted. I put that on her.
Anyway, I just wanted to share this experience so I can look back in a few years when I have several deals done and laugh.
