Contacted Owner of rental property to sell me his house, now what

[Eric Teran]

About two weeks ago my wife and I were out for a walk in the neighborhood (Alexandria, VA) and we noticed a house for rent that was not that well kept. My wife told me to call the number on the window so I did. I told the Owner if he would consider selling the property to us and he said, "I've never thought of that but I am going think it over. It is an interesting proposition. I'll get back to you." That night I went online to search the tax records and found out that he now lives in California and has owned the property for over 20 years. He has been renting it for around 10 years.

The city has appraised the house around $450k and to flip it we would need to put another $50k-$100k into it. Depending if we just fix it up or add another 500 SF to the house the ARV would range from $550k - $700k. I'm an Architect and like to build so I'm all for adding some square feet and making more on the flip.

I ask BP ... Now what? 

Do I call again and make him an offer? 

If I can get the house for around $425k this is a winning situation. How do I phrase it for him to accept a lesser offer than the city appraisal? I know I can tell him that no realtors have to be involved but is there anything else? Another option is to just keep calling and making sure he knows I'm here once he is ready to sell.

Thanks, BP for the advice!

[Doug W.]

@Eric Teran

I know your neighborhood well. 22311. I have lived in it and flipped in it. That being said... I doubt your timeline of "a few weeks" works if it involves remodeling the kitchen and baths, other plumbing work, electrical, HVAC, paint, refinishing floors, replacing windows, redoing roof, etc. Plus you still have to add in time to market it and, if it goes under contract, the time in escrow.

You also aren't getting a 500 sqft addition for an additional $50k if you care about quality. 

To answer your question: #1