Miami, FL · Member since 2011 · 299 posts · 75 votes
Hello guys,
I have a seller who needs to sell quick and is asking close to market price for his property. This is a condo in a desirable area in Miami FL, near the ocean.
I just have exchanged emails with him but judging my the pics the condo might need some paint job and not much more (lets assume). I know about the 70% rule of thumb for fixers but not sure how to come up with a realistic investor-level offer for this kind of houses, the ones that need little-to-no work.
I could treat it like a 'fixer" but with less cost or repairs, so I was thinking in offering about 70% of the market price, but in my newbies eyes, that's a hell of a discount.
Asking price: $340K
70% Offer: $241K
Comps:
- Similar unit in the same building: $353K
- Similar units in another building closer to the water: $345K & $375K
I would say you're OK at that number, as the investor will need that buffer to profit as they absorb the holding costs. If he's motivated to sell quickly, you take that off of his plate. If no rehab work is needed, then I wouldn't necessarily add anything for the sake of it. You can always get under contract, inspect, and reset if needed.
That gives me a bit of the confidence I need. Does the 70% rule then also applies for these kind of houses or is there any other quick and dirty method to come up with the appropriate offers for them?
The 70% rule is very general, but works for most cases in homes below $400k or so. Also factor in your profit if wholesaling. Use the BP calculators to double check as well. Either way, get it under contract and work through your diligence. Without a contract, you're still on the outside looking in!