i NEED HELP WITH THIS DEAL THEY COUNTERED MY OFFERED

Bird Dogs, Wholesaling
1

I was trying to put this property under contract for 50k they counter offered for 65 the homes repair value is under 10k and the homes in the area go for as much as 80k what what do you think would be a fair number to counter there counter offer with? (JUST LOOKING FOR SOME FEED BACK FROM YOU GUYS)

2

as much as 80k as in could go for less? how much repairs? who is paying for closing costs? how long will it take to sell? how do you plan on selling? is it a keeper for renting?

3

Fadi is right. Without more info it is impossible for anyone to provide a credible answer.

4

I plan on whole selling the deal the buyer is paying for closing cost and the property is in very good condition I estimated the repair cost at about 10k the homes in the area go for about 80k on the highest level and yes the property could be worth less it was appraised at 75k after rehab it would make a great home for an investor to hold for rent or sell to a first home buyer.

5

take the ARV (After Repair Value) which cant be more that $80k subtract repairs ($10K) minus your fee ($5K) and any other various costs. I wouldn’t go above $62,500. Remember when you make a counteroffer you no longer have the power of acceptance so make an offer that you are comfortable with having to pay.

6

If you are POSITIVE that the ARV is 75K and the repairs are 10K and you plan on doing a flip than this is what it is worth.

65% of the ARV - Cost of Repairs = MAO (maximum allowable offer. Notice the word maximum! Don’t go over or you won’t be selling the property)
or
65% of $75,000 - $10,000 = MAO
or
$48,750 - $10,000 = MAO
or
$38,750 = Your Maximum Allowable Offer

Now if you are wholesaling this property to another flipper other than yourself, subtract your fee from that MAO and you have what your offer will be.

Therefore, your first offer was way too high and you were already getting ready to get your a** handed to you so don’t bother to counter offer and come back here next time you put in your first offer on another house until you fully understand real estate valuation.

7

My thoughts exactly Hooch. He does not have a deal.

8

Hooch is spot on follow that formula and you will never fail

9

wow, I guess hooch just schooled me on this… hope the deal works out

10

62,500 wouldn’t fly because:

  1. If you add the repairs and assignment fee you will be at $77,500. The property could be worth $75,000.
  2. It takes few months to fix it, and to find a buyer meaning someone is paying for a loan, taxes,utilities,insurance till the house is sold, that is another $5k+
  3. Even if the investor buyer is paying for closing costs, that needs to come out of the offer price. Unless it is a rental, the cost of buying and selling for the investor can be in the $12k-$16k range (closing costs to buy, closing costs to sell, advertising or agent fees to sell)
  4. Fudge factor in case things go sour
  5. The flip fee.

My offer would be in the 30s as well or I would walk.