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What Would You Offer???

jeffm_60 profile photo
  • Wednesday, February 25, 2004 @ 09:25 PM EST
  • 2 Comments

Found a vacant property. It was purchased in '91 for 20k. Quick estimate says it needs 20k in repairs. Comps go for 85k. The owner also owes about 6k in back taxes.

I know that people use the .70-.75 rule of thumb, but would I be responsible for the back taxes as well? If so I would definitely have to factor this into my offer. I want to flip the property, but am not sure how the whole tax issue fits into the picture.

Comments(2)

  • no photo
    rjs935225th February, 2004

    A quick and dirty formula -

    85k (after repair value) x .65 = 55k
    55k - 20k fix up costs - 6k back taxes = 29k.

    So my answer (which I'm sure is not the ONLY answer) is 29k.

    Ryan J. Schnabel

  • no photo
    jeffm_6025th February, 2004

    Ok good, something like that is what I was thinking. Now I just have to find the seller. Easier said than done sometimes.

    -thanx

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