Help Calculating What To Offer
I was offered a property for $50K bank owned, it is on .25 acres, got a 3bd/1ba home on it. The home need some repair and could stand some remodelling - we estimate about $10-15K.
It is in an area with modest and small homes. The county assessed it at $45000 (home and lot). vacant lots that size in the area are going for $20-25K. There has not been many homes for sale in that area but ones that sold 3 years or so ago went for $90K. It is a small town and folks are always looking for rentals.
I have not dealt with this area before so I am not sure of the market.
I was thinking to offer the bank $39K.
Any suggestions would be very welcomed
You first have to determine what your business model looks like...
Are you flipping, L/O, ???
What is your overhead, are you using your income from REIing to pay cost of living expenses.
Determine TODAYS value of the property in its As Is condition.
If the fair market value for the property is 90k As Is I would only off 38k (52k less) and never more than 75% of the worth value.
I use 52k as a bench mark based on overhead, income goals and number of units turned.
I understand it is a catch 22 and you want to do a deal just make sure you’re not under pricing your offer or over pricing your offer.
[addsig]
Ruman,
What is not true about my statement.
Facts are that the buyer can make an offer as many times as they choose. The seller can choose to accept, reject or negotiate the offers.
Jim
I am interested in Flipping it. I do not rely on the RE to pay living costs but this would be a bank loan so I would like to sell fast.
I say FMV at the moment is $80-$90K. It is a little hard to gauge as not much turnover in homes in the area and no other homes really close by to make comparisons.