FIRST COUNTER OFFER

What is the ARV on this property. What did your research on sold, listed and currently under contract comps tell you this property will SELL for after your $5000 re hab estimate?
What is your exit strategy(s) on this one?
If you are going to wholesale it, do you have ACTUAL cash buyers lined up?

Good luck and congratulations on taking action and making offers!

Michael Mangham
MD Home Acquisitions LLC

I was talking to my Agent and he seems to think they was asking to high also and he said that the houses around there was selling for $125k tops so he said If you did fix the stuff wrong that I could sell the property for $125 easy..So even If My buyer fixes the Gable Ends that are rotting out and do the flooring.I do have a Buyer for it.He would like to make at lease $25/$30k

List $139,900
ARV $125k
Counter back with $69,983
anything else you need to help me with my first counter offer

Lets say this house will sell quickly at $125,000 (what are the average DOM in this area?) And rehab is $10,000.

This is what I would offer.
$125,000 at 65% = $81,250 minus repairs = $71,250 max offer price

I would offer it to my buyer at:
$125,000 at 70%= $88,750 minus repairs = $78,750 sell price

A $7500 assignment fee (5%) You can negotiate this amount if you need to in order to get this deal of course.

This is how to present the offer to your buyer

Sell for $125,000
Commissions, closing costs = 8% =$10,000
Holding costs, insurance, taxes, utilities etc. = 3% = $3,750
Rehab $10,000
Buy price $78,750
Net profit = $22,500
That is a 24.3% ROI

If this guy is not happy with a 24% ROI he is not real!!

If you get this property under contract, always require your buyer to put up a non refundable earnest money check. This will separate the REAL buyers from the ones that just want to tie up your property while THEY search for a buyer. I don't mind people bringing in a buyer, they just have to have them up front!

Michael Mangham
MD Home Acquisitions LLC