I have a house flip deal I'm looking at purchasing and they're asking $80,000 for a 3br 2ba 1601 sqft living area. The home needs about $20000 to $25000 in repairs. I had the realtor run some comps and the had a similar house sell in the same subdivision for $137,000 (88 PSFT) 1546 LA. I spoke to the realtor and they are doing a highest and best offer on Monday. I'm coming up with a offer around $73.621,I think it may go over asking price. I would like to get some advice on what would be you max offer on this deal.
If you go with the 70% rule then you shouldn't pay more than 70,900. What will your financing cost you? Was that other house fully renovated, and if so, how nice was the finish? Where did you get your 20k renovation number from? If you got it for 70k and renovated it for 30k (it aaaaaaalways costs more) you are probably ok depending on your finance costs. No way would go near 80k though, it is too close. I would offer 60k and a quick close.
I'll bet on 70k. It sounds like 20-25k is a range zone, but not safe zone. I'd go with Alex on this on 30k as rehab, and even reduce the comps to 130 instead of 137. 73 might do, though, considering if you have a quick close.
@Alex- Ok thanks, I have a 12 month interest only Construction loan setup my banker at 5.6 % rate. I'm a license GC so I came up with the estimate.
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