How To Determine Price
If I intend to flip a property do I still need to determine the APR (After Repair Value) before offering a price or should I just make sure that I'm buying the property for 80% or less of the market or" as is" value?
yea, you need to know the ARV. If you get a $100,000 at $80,000 you don't have anything if it's condemed and needs 80K in fix up.
Thanks for the reply
Since I'm not a contractor and in most cases will need to make an offer before I have an inspection done. What do I base my offer price on?
I know that I can put a clause in the contract "subject to inspection" etc.
Most of the time when you're buying wholesale properties, there are no warranties, implied or otherwise. You and the seller know that they are selling a piece of junk. (At least for now) I wouldn't bother with alot of escape clauses, or your seller will doubt your sincerity, or credibility, and that adds up to no sale.. It may be worth your while to speak to a good appraiser, and pay them to come out to the house and give you an estimate of what they think the repairs will cost. Have him break it down Materials / Labor. Reassure him that you're just trying to get an idea of the costs involved. Your seller will probably not have a problem with this. Especially since they have a signed agreement with you. Since you're closing quickly for all cash, you have given them next to nothing as an earnest money deposit with the offer. If the repairs are going to make the house too expensive, you can either renegotiate, or walk away and lose your deposit. After a few of these, you'll be able to develop a good idea what the repairs will cost without the help of your appraiser.
Good luck,
Jeff