In need of help making a offer on a potiential wholesale/flip

Buying & Selling Real Estate
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In need of help making a offer on a potiential wholesale/flip

Trevor S Foster
Gaithersburg, MD · Member since 2017 · 127 posts · 23 votes

Hello, I have a potiential deal on my hands and Im in the middle of trying to run the numbers and Im getting somewhat confused and overwhelmed.

This is my first deal and Im not sure what to offer the home owner. advice would be much much needed.

Asking Price: 255,000

Townhome

2 Story

3 bed

2.5 bath

1696 SQFT

2 parking spaces

I know I have a deal on my hands that can be either wholesale or flipped. Since this is my very first potiential deal I really want to get this right. I have an idea in my head but I just need reassurance.

Im thinking to ask to offer 215-220k. I believe the entire place will need to be updated.

What do you guys think?

One comp sold at 257k that had a updated kitchen new carpet, tile and paint. bathrooms werent really updated.

this home I know will need kitchen, laundry, all bathrooms updated. as well the hardwood floors and carpet.

what do you guys think?

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Brandon SturgillBusiness Member
Real Estate Broker · Columbus, OH · Member since 2013 · 3k+ posts · 1k+ votes
9y

@Trevor S Foster you need a local expert if you are not versed in running comps. Most agents have access to good analysis tools, you just need to find one and ask for assistance running comps. Outside of that, you're forced to use public tools like Zillow, Trulia, and Redfin....

Most county auditors are on the same platform at this point and have data on comparable sales...you just need to dig a bit. For a back of the envelope, you can use sq. ft. for purchase and renovation...for example $100 sq. ft for purchase and $25 sq. ft. for renovation....this is just an example, actual valuation is a science.

General rule if you use a popular site is stay with closed comps sold within 6 month and not more than 1 mile from the subject (again just a starting point...we would use more than just closed comps to predict price).

You may have to pay for it, but a Broker Price Opinion may be a decent way to go....

As far as acquisition and exit, things get complicated...too much detail to type here...glad to discuss further, though.

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  • Brandon SturgillBusiness Member
    Real Estate Broker · Columbus, OH · Member since 2013 · 3k+ posts · 1k+ votes
    9y

    @Trevor S Foster you need a local expert if you are not versed in running comps. Most agents have access to good analysis tools, you just need to find one and ask for assistance running comps. Outside of that, you're forced to use public tools like Zillow, Trulia, and Redfin....

    Most county auditors are on the same platform at this point and have data on comparable sales...you just need to dig a bit. For a back of the envelope, you can use sq. ft. for purchase and renovation...for example $100 sq. ft for purchase and $25 sq. ft. for renovation....this is just an example, actual valuation is a science.

    General rule if you use a popular site is stay with closed comps sold within 6 month and not more than 1 mile from the subject (again just a starting point...we would use more than just closed comps to predict price).

    You may have to pay for it, but a Broker Price Opinion may be a decent way to go....

    As far as acquisition and exit, things get complicated...too much detail to type here...glad to discuss further, though.

    937-979-7000
    Realize Multifamily Group11 Review
    View Page
    1Reply
  • Account Closed
    Real Estate Investor · Shelton, WA · Member since 2013 · 369 posts · 639 votes
    9y

    @Trevor S Foster If the comp at $257k is your ARV, you're already in the low $230ks after closing costs and agent commissions when you sell.. throw the cost of a full rehab plus your expected profit in there and.. you get the idea.

    ARV * .7 - Repairs.

    It's not always the perfect formula, but it'll get you close.

    If they're asking for $255k, i'd imagine you're going to be hard pressed to get them to let it go for well under $200k, where you need it to be.

    1Reply
  • Neil Goradia
    Developer · Indianapolis, IN · Member since 2012 · 259 posts · 129 votes
    9y

    I agree with @Account Closed's assessment. Doesn't seem to be much profit to be made here.

    1Reply
  • Trevor S Foster
    OP
    Gaithersburg, MD · Member since 2017 · 127 posts · 23 votes
    9y

    Yeah I didn't think it was much profit because of how much she wants. the only hope I had was the surrounding areas and how the new development is going. Most townhomes in my area are being bought up and fixed. the prices are going up into the 300's.

    But I agree with you all about getting it for 200 or under. I was thinking of buying to do a live in flip. I believe this will go up in price. There have been 4 other homes sold on the same street for around 250 and they haven't been rehabbed yet. I think I'll move on unless I can get it for 200 or under.

    I thought the neighborhood value would increase because of the fact that investors are buying these other homes at 250 and just starting to renovate.

    0Reply
  • Alex Klimenko
    Rental Property Investor · Harrisonburg, VA · Member since 2017 · 17 posts · 8 votes
    9y
    numbers look way too small in my opinion for a flip. especially if you want to flip to an investor who also wants to make money. IMO that property would best be used for a rental, and if you can rent it out by room, even better.
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