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Updated over 7 years ago on . Most recent reply

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Andrew P.
  • Georgia
29
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35
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How can I make sure my offer is attractive?

Andrew P.
  • Georgia
Posted

I am putting in my first offer on a house rehab. The asking price is $250k and the ARV is $520k. Total repairs of around $150k. Holding costs at $20k. There is a lot of competition on this house. I am sure someone is going to make a cash offer that is attractive. Unfortunately I am not in the position to offer cash. I am going to put in an offer around $300k with no concessions but it will have an inspection clause and 7 day due diligence. Any advice? I'm very new to this so if I'm missing something major please let me know. Thanks

  • Andrew P.
  • Most Popular Reply

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    Brian Pulaski
    • Flipper/Rehabber
    • Montgomery, NY
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    Brian Pulaski
    • Flipper/Rehabber
    • Montgomery, NY
    Replied

    Maybe I am reading your numbers wrong? I assume this is a flip that you will resell, correct?

    $520,000 ARV

    - closing on the sale end is probably $35,000.

    - closing on the buy end end, maybe $5000.

    - your offer of $300,000.

    - your holding costs of $20,000.

    - your rehab costs of $150,000.

    Unless I am missing other reasons you won't have these costs, I see you barely making any profit ($10,000). After taxes, maybe $6000. Is this house worth a tiny to zero profit? That would concern me more than how to make your $300k offer stick.

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