I comped it at somwhere in between 375 and 400k. It’s 3000 sq feet or so with a half acre lot (much larger than average in the area). It’s totally destroyed and probably hasn’t been lived in for 3 years now. I estimate repairs and renovations to be somewhere around 120k (I don’t really know how to do this other than based on other people’s estimates for what I think are similar jobs). This would be my first flip and although it is a huge undertaking I feel confidant that I have found a good contractor who will follow a contract with a time clause.
I have the owners number and plan to call him soon, but the real question I have is how much should I offer? Using my formula and leaving a 50k profit for yours truly I think I can offer anything under about 150k. I havn’t spoken with the owner as I said, but I just can’t imagine that he wouldnt want to get rid of this house for a lot less than that.
Should I start out at some ridiculously low number or will I risk insulting him and never having him return my calls again? This deal seems so so so good. I think the guy collected from his insurance company as if the house was a total loss. Paid off the mortgage, bought a new house elsewhere and just “forgot” he even owned this house I want. This being the case If I just show up with a 50k dollar offer (still allowing myself 15 days due dilligence) wouldnt the guy jump on the opportunity to collect some bonus cash?
Has anyone had any success on deals like this. Why is the “find a vacant property, find the owner and make a realy low offer” ever talked about? Any general thoughts about my situation would be appreciated. Within the next few days I should have officially set up my LLC and have enough capital to easilly obtain a pre-approval letter. I have a lawyer, accountant, and agent for the technicallities. I have the contractor and insector.
I would appreciate any general thoughts on this project…Thanks.