I have a deal that’s in negotiations at this time (at least I hope you all consider it a deal, this would make my very first).

I ran across a 3/1 900 sq. ft. rehab that’s located in a less-desirable area of Champaign. The seller originally was asking $8K and estimated that the property needed $15K of rehab (new drywall and plumbing work). The ARV of this property is around $40K.

I made a lowball offer of $2,500 yesterday. The seller called me today and verbally countered at $5K. I’m thinking of countering at $3,500 with 60 days allowed for closing.

Here is my wholesale exit strategy. I think I could flip this very quickly to a first time homebuyer who would use the $8K tax credit and the HUD 203K rehab loan to perform the necessary rehab plus additional improvements that they desire.

I would like to wholesale the property at $8K and make a quick $4,500. By offering the property at $8K, the house could be marketed as a “Free House” due to the fact that the $8K credit may now be used by buyers towards the down-payment.

I just ended a phone call with Shane as I type this and he strongly suggests that I atleast take a look at the inside of the property, regardless of the lowball bid, he says if it’s bulldoze worthy then it’s not even worth the time. He also, suggests that I flip the property to another investor and not a retail buyer due to the greater ease of transaction. Per his suggestion, I just scheduled to view the interior early next week. The seller seemed a little annoyed. But oh well, I’m not the one in the bind and needing to sell badly. We shall see how this turns out. $4,500 would sure look good in the marketing budget right about now…

- Justin

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