First Deal ?

I would really go low, like $220,000 or $199,000, your looking for his response to this low offer. He's asking for 2006 prices, thats why he' still sitting there, I would low ball him and see what his reaction is, he'll let you know. Like you said it may need $50,000 to $100,000 in updating or not, you just want to see what the guy thinks it worth, and why he wants that amount, the market is down and still dropping. Give it try, you never know.

I'm going to give it a try tomorrrow. Would you suggest I make my offer after the visit or while I am at the property ?

I would make the offer after going though the property, remmenber to remind him there are a ton of properties on the market at this time. Good luck and have fun with it, the worst he you say is no, so what you didn't have a deal any way. Remmenber this is a buyers market, not the other way around, there are lots of deals out there.

1. You must determine what kind of rehab/remodel is needed. Owners always say the property needs no work. It could be in good shape, but have 80's carpet, paint, appliances, etc. Obviously it is not worth $385,000.
So your rehab/ remodel estimate is??

2. You must determine what the house will SELL for after your remodel.
ARV is ????

If you do not know these numbers, all you are doing is throwing a bunch of numbers around with no basis in fact. You could shoot out what you think is a low ball offer and pay to much!
You also do not what to be unfair and totally low ball some one. This is called greed. Base your offer on real numbers. In the long run this strategy will serve you and your business well.

So your offer should be ARV times 65% minus repair costs. (then negotiate if ness.)
Say you determine through sold, listed and under contract comps that this property will sell for $325,000 and you find through looking and getting 2 or more contractors estimates (unless you can accurately estimate rehabs) that a remodel is $50,000. NOW you have the info needed to make an intelligent offer that you can back up with actual numbers!!
So $325,000 at 65% = $211,250 minus repairs = $161,250 offer price.
It may be worth $380,000 with only $10,000 remodel
So $380,000 At 65% = $247,000 minus repair = $237,000 offer price.

This is an example why you need to know what you are actually doing! If the house is worth $380,000 and you offer him $160,000 he won't take it! If you offer him $$237,000 he might take it and you have a great deal.

Does this make sense? Do your due diligence before you make an offer, don't throw an offer at some one out of thin air.

Let us know what your numbers are after your research!

Michael Mangham
MD Home Acquisitions LLC

You need to have your buyers ready to assign; otherwise you may end up doing a lot of work for nothing.
This house seems pretty large; so it may take a special buyer to purchase it...

Wishing you success,

Valerie

It usually doesn't matter what they're asking if he owes nothing on the property. It all comes down to the comparable's. Gather a list of properties sold within the last 6 months with similar qualities and see what they are selling for. Ask your Realtor for a CMA (comparable market analysis) of the property.

If the comps show the house is worth 320k. Then you should offer no more than 60% of that AFTER repairs.

- 60% of 320k = 192k
- say the repairs are 10k, that lowers it to 182k
- say you want to make 5k, that lowers it to 177k

This is just an example. But it gives you an idea not to base your offers on the sellers asking price, but base it off what you can sell it for.

Even if its worth more than hes asking, say 400k. Heres how it would look:

- 60% of 400k = 240k
- 10k repairs = 230k
- 5k assignment fee = OFFER 225k

It's still less than what hes asking, even though the house is worth more than hes asking. ALWAYS make sure the numbers work.