Newbie needs help.

[Dan Golden]

Found an out of state owner that is military and hasn't been in the home for 6 years. Zillow has estimate at $171k. She owes $117 but wants $155 because they took $38 out of retirement to repair home after renters trashed it. Because of this bad experience she's not willing to hold a note. Any ideas where I can save this deal? Home needs next to no repairs, they had family keep an eye on it and have just been paying the mortgage for 6 years with it vacant. Do I just cash offer and try and flip it as a cash flow property?

[Danny Day]

Dan Golden, first welcome to BP. I notice this is your first post. Congrats on finding this deal. Here are the issues I see right off the top.

1.) Zillow as an accurate ARV. This doesn't work, what does your local MLS have for a market price, and days on market?

2.) Lets say it is $171k arv. At paying them $155 you're already 90% in without doing any rehab. This is not a deal. Use this formula to calculate your offers:

Max Offer = (ARV * 70%) - Repairs

So if your repairs were.. lets say, $25,000 and you knew you could sell it for $171,000 here is how we would formulate your highest offer:

Max offer = ( $171,000 * .70 ) - $25,000
Max offer = $119,700 - $25,000
Max offer = $94,700

This is assuming the after repair value is $171,000 and that the house needs $25,000 in repairs. You will need to verify the after repair value with a local realtor, and get your cost estimation down for the construction cost.

If they won't agree to your max offer amount then walk away. There are many more deals. Also don't start with your max offer as your initial offer. Start lower.. $10k-15k lower. Then if you need to come up, you've got room to make it towards your max offer.

The one who wins negotiation is the one who has the ability and strength to walk away.

Good luck

Danny