In today's video, I'm going to be showing you exactly how to make an offer on a property in
less than 10 minutes. This is actually a fixed and flip deal. This was actually one I was very close
to making an offer on, because it's kind of near where I live and it was a really good deal. This
was actually listed on the MLS. You can see it's still under contract. If this thing sells for what
I think it's going to sell, like in the next three to four months, I'm going to be kicking myself. So
it's listed at 350, it had a few offers on it. So I know it's going to sell a bit above that.
1500 square foot condo. What was interesting about this? They said major rehab needed and there's
no photos of it. So usually that's the case. However, it's not always the case. When I went
to this property, there was like some junk. There was some bed frames and some trash and stuff like
that, but it was just in original condition. If someone just painted the place and junked it out,
they could probably resell it for a ton. I'm going to show you exactly the numbers and how
to evaluate deals like this. The very first thing we're going to do is pull up the comps.
So it's a condo. So we want to find other two bedroom comps, ideally at 1500 square feet,
if not, pretty close to that, because with condos like price per square foot is actually a big deal.
Single family house is a little bit less so, but just a 100 square foot on a condo can
actually make a pretty big difference in terms of pricing. This is a big condo, 1500 square feet.
I'm going to pull up all the large two bedroom condos that's sold in the same subdivision in
Fairlington, because you want to keep you to the same subdivision. And because this condo is kind
of unusually large, I typically only go back like six months, but I'm going to go back a little bit
longer just because I don't think there was too many of these ones that sold. Most of the
ones that sell in that neighborhood are like, I think a 1,000 square feet. Two bed, two baths,
going back this far. The opposite is true too. If I get like 20 results from this type of condo,
we're going to do the similar square footage. We'll do like 1200 to like 1800 square feet,
because I don't want all the smaller units popping up, but if I did get 20 results,
then I might only go back three months or four months or that type of thing.
All right. This is not even the same subdivision. We have a couple different properties to work with
here. That should be good. We have three sold. The red means they were sold. The two green ones
means it was under contract. Gone results. So what we want to do is we want to get an after
renovated value. That's the first step in running a 10 minute offer and it doesn't have to be exact,
because I'll show you in a second here, but we want to have a good idea of what
you sell for it renovated. All right. This is 1286, a little bit smaller. This is 1500,
1322, 1400 and then 1500. So we'll get a pretty good idea. We could go
back like eight months and whatnot, but I think this should be fine.
You also want to make sure that they're the same style, because some of these are three levels.
This one's a two level. So this is a pretty good comp. This one is a two level. This one also has a
patio, though. The one I'm looking at doesn't. So like an appraiser, when they look at it, they're
going to like an end unit. They might add 10,000 or take away 10,000 if it's not an end unit. A
patio, this might be like a $10,000 feature. So keep that in mind as well. So here's another one.
These are actually pretty renovated, which is good, because this one's going to be renovated.
So yeah, this nicely like full renovation. That one's active, hasn't sold. These ones, both sold
basically 575 and this one sold at 575. Perfect. So we need to make our property look like this
so we can kind of tell just straight off the bat that these renovations of around this same size,
are probably going to sell for 575. Now what I usually do is, I'll do like a price per square
foot basis. If we want to be exact as condos, it's more specific. This one's the exact same
square footage, but it has that little back area, but I'm going to get a median square footage of
the renovated one. So 575 divided by 1500. That's about 383 per square foot for a renovated one.
This one's 575 divided by 1322, it's about 434 per square foot. Then this one's 575 divided by 1400,
equals about 410 per square foot. We can probably say, it's going to sell for about 410
pretty conservatively, per square foot, because the good thing about this one, although it doesn't
have the backyard, it's a top floor unit and it just has nice tall... It's an end unit and it's
top floor. Those are two things that buyers look for. If we do 410 per square foot, times 1500,
that gets us to 615,000. Now it might sell for 615,000,
but conservatively I'm probably just going to go with these numbers, because maybe we can say 585.
We can take a look at this one and this one's nicely renovated, but I don't want to get too
crazy, because this one already sold renovated for 575. We could say, we'll say 585 is the after
renovated value. It's quite possible it could sell over 600, but we are going to take that number
and then we multiply it times 0.7. This is the formula. This is the 10 minute formula. So number
one, step one, find the after renovated value. In this case, we'll say 585 to be conservative.
Then we multiply that number of times 0.7. That gives us enough margin of safety for repairs,
profit things that can come up. That type of thing. So 585 times 0.7, that brings us to 409.
Now a renovation like this, we got to renovate two bathrooms, a kitchen,
refinish the floors, paint. We're probably easily looking at about 40, 50, maybe as high as 60,000.
So you take after renovated value, times it by 0.7 and then subtract for cost repairs. Let's
say 50,000. That brings us down to 360 for our asking price. If you buy it at this formula,
you're buying a really freaking good deal. It doesn't always have to be exact and match up
with those numbers, because back in the day, I passed up on a lot of great deals, because I
was like too conservative. So when we run those numbers, it says that 360 would be a good deal.
Now I know that this property had offers, I think right above 400. So you're saying, well,
400, that's not even close to being a good deal. Well, if you get it anywhere in the ballpark of
the 70% formula, the next step to do is to bring out the deal analyzer. I have a deal analyzer on
my website that you can download for free and especially with condos, because there's like a
little bit less risk, because there's not as much to do. There's no basements and things like that.
What we want to do, if it's anywhere near the ballpark, like you can pay sometimes 80%
of the ARV and it'd still be a good deal. You just have to, it depends on the risk.
We'll put 585 as the ARV. Then right here, we'll put in repairs, we'll put in 50,000.
Might need more, might need a little bit less. We'll put in 50,000.
Then we got to plug in the numbers. So I think this one had offers around 400.
I'm going to see the most that I could pay for it, while still being conservative and still being a
good deal for me, because a deal like this, I'm willing to make a little bit less money,
because it's a condo and there's less things that can happen. So even me paying 400 at 50K,
71K net profit, that's really good for a condo. So you know what? I could probably pay even more.
I could probably pay like 425 for this and look, I'm still making 44,000 and that's kind of getting
into the range where maybe you don't want to do the deal, because what if this sells for
like 565 and then maybe your repairs, you're over budget and it's like 65K in renovations.
Then you just spent several months and you make like 20K,
but I'm willing to, because it's not some massive project. I'm willing to be a little bit riskier.
Usually a lot of people will say, whatever you put into the project in terms of repairs,
is the net profit that you want to make. That's a good way of like kind of also being conservative.
I'm interested to see what this property sells for, like six to 12 months down the
road. Somebody put it in the comment section below. Someone look it up for me, please,
because I wish I would've bought this deal. That's how you make an offer in basically 10
minutes. That's how you can tell if it's a good deal. If you have any questions,
drop them in the comment section below and definitely download my deal analyzer. See you.