Good afternoon Investors, I have an appointment coming up soon. The house ARV is 223k. The home has had some repairs done to it, probably needs another 10-15k in repairs at most, I haven't walked the property yet, but the owner granted permission to walk around the premises. Has nice flooring and new windows. The home is a 4/3 and about 2,400 sq ft. The owner is eager to sale as it's one of his last properties and he no longer wants to put money in the home. He said I caught him at a great time as he wasn't ready to sell the property prior. He's an investor himself and understands what I'm doing as far exit strategies; so there's no underlying secrets and he's not hurting for the cash. My question is what would be an appropriate ‘fair' number to start/end with? Would anything under 100k be absurd ? Need feedback and insights. Thank you.
@Elvin Green Have you asked him what he is expecting? Then work from that. Ask him how he came to his number.
Yes, anything under $100k is absurb. Especially if he is an investor. He could call any number of people to get an offer closer to market. If he takes under $100k and the repairs are truely 10-15k...then the ARV would not be $223K
@Elvin Green it doesn’t sound like you have a motivated seller or distressed property so I don’t think your going to get it at a price that works for a flip. Maybe an owner finance. Ask the seller what he expects for the property then get creative if it’s retail.
@Kyle Mccaw The House last sold for 220,500. But doing a full remodel will of course not only cost 10-15k; it doesn’t have stainless steel appliances or anything. Given the smaller sq ft. it’s opportunity has a potential cap compared to other homes in the market ranging from 2600-2800 sq ft. with the same number of Br/Ba. selling at 230k+. The home across the street sold for 244k, 2700 sq ft.
You’re correct he very well could sell it for more, but being an investor why wouldn’t you list it to get full value ? Time and fees. Money is already been put in the home, so why continue to pay for something you don’t want. He doesn’t mind the spread, but at least wants to make it worth his while.
@Greg Dickerson He answered a Direct Mailer, that’s pretty low on the scale of who you call first to buy a nice home. He could have easily ignored it and three it in the trash and just called up a Realtor.
I was honest with him and he understood I’ve been active in investing for about 6 months now but not having made a deal. Yet. It’s tough but you just keep going and keep calling prospects. I take it as a motivation to sell and will approach it as such. It being “last property” is just saying you have a home you don’t want to deal with anymore. And the walk around will reveal more insight and the rest of the rehab. I’m not saying he will just give it away, but his tone said ‘if I like the number you can have it’.