Making a blind 30% below listing price offer?

Question

So, I watched a Bigger Pockets video with Chris Heeren where he mentioned submitting a 30% below listing price offer with a walk-through contingency in it with the hopes that the seller would then counter offer and give you a two to three day period to check out the house. He also said that he doesn't submit this offer if it doesn't follow the "teen percent role" but it wasn't clear which number that was and also if it is the Cash on Cash ROI then how would he be able to estimate the cost of renovations to find that teen number if he hasn't seen the house? Thank you all again!

Russell Brazil · Answer

Blind lowball offers are an easy way to piss of a lot of people.

Chris Heeren · Answer

2 Percent Rule. In the area where I invest, I will only put an offer on a property that will generate a monthly rent that is 2% of the purchase price. If the house will rent out for $900, I won't offer more than $45K for the property. This includes a rough estimate of rehab. A typical cosmetic rehab will cost between $5K & 10K (Paint, Flooring, Light Fixtures, fix broke items and things not up to code etc) I'm not looking to put new roofs, siding, or any major repair items on the properties I buy. If I am, I will make sure those costs are subtracted from the purchase price.