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The Inherited House: How Two Offers Beat One
Here’s a fairly common situation:
Heirs inherit a house they don’t want, can’t manage, and would really prefer to never think about again.
Today’s case from the Investor’s Toolbox shows why walking into that conversation with two very different offers gives you leverage most investors never have.
The Property
A 3,200-square-foot house in Georgia.
Inherited by adult children living out of state.
Nothing updated in 20 years.
Needs a new roof. HVAC is dead. Everything else is just… tired.
They wanted it sold. They weren’t desperate for cash—but they were very uninterested in managing a rehab from three states away.
The Numbers:
Original purchase (20 years ago): $350,000
Remaining mortgage: $139,731
ARV: $750,000
Fair market rent: $4,500/month
The First Pass (What Most Investors Do)
That put our Maximum Allowable Offer at $394,000, netting the sellers about $254,000 after payoff.
Perfectly reasonable cash deal. Most investors would stop here.
We didn’t.
The Second Look (Where the Edge Came From)
Aside from the roof and HVAC, the house was structurally solid. Just dated finishes. That made it a strong candidate for a lease-option strategy.
We needed one more data point: their monthly mortgage payment. They didn’t provide it, so we estimated.
Assuming 20% down in 2004 at ~5.8%, their payment was somewhat less than $2,000/month including taxes and insurance.
That was enough to structure a second offer.
The Two Offers
Offer #1: Cash
Purchase price: $395,000
Seller nets: ~$250,000
Our projected profit: $160,000
Capital required: ~$70,000 using hard money
Offer #2: Two-Year Lease Option
$5,000 option payment
$2,000/month lease payment (covers their mortgage)
$500,000 option price in 24 months
We replace roof and HVAC (~$18,000)
Tenant-buyer handles cosmetic updates
Projected profit: ~$350,000
Capital required: ~$20,000
We didn’t present this as “here’s our offer.”
We presented it as:
“Here are two ways we can solve your problem.”
The Negotiation
They didn’t want to wait two years.
They countered at $450,000 cash.
We ran the numbers quickly:
ARV: $750,000
Selling costs (8%): $60,000
Repairs: $100,000
Hard money + carrying costs: ~$113,000
Total expenses: ~$273,000
At a $450,000 purchase price, the deal still cleared ~$127,000.
We accepted.
What Actually Happened
Reality was kinder than the spreadsheet.
Rehab came in $45,000 under estimate.
Instead of hard money, I brought in a JV partner who funded everything.
Total profit approached $200,000.
My share: $95,000 with zero cash out of pocket.
The Real Lesson
The power wasn’t the second offer itself.
It was the choice.
Instead of forcing a yes-or-no decision, we gave the sellers agency. Two paths. Same destination. Different timelines.
When they countered, we weren’t scrambling to “make the numbers work.” We were evaluating their counter against two profitable scenarios we’d already modeled.
Most investors walk in with one offer and hope it sticks.
We walked in with two—and let the sellers tell us which one mattered more.
They chose speed.
We adjusted.
Everyone won.
Your Turn: Next Week’s Challenge
Here’s a real scenario from our archives. We’ll share what we offered—and what happened—next week.
The Situation:
Seller inherited a free-and-clear house. Found it occupied by non-paying tenants and eight cats. No leases. Evidence of drug use. Significant repairs needed.
Seller wants nothing to do with evictions, cleanup, or rehab. Just wants out.
The Numbers:
ARV: $175,000
Fair market rent: $1,500
Estimated repairs: $97,000
2,200 sq ft | Built 1990 | Free and clear
Your move:
Cash offer? Creative? Both?
Reply with your analysis. We’ll feature the best responses next week—alongside what actually happened.
Reminder: “Unlock Your Potential” Workshop Feb 21
See how we handled that inherited house today with multiple offers? That's not luck — that's a system. I'm teaching the full framework in the Unlock Your Potential Workshop on Feb 21: subject-to, seller financing, master lease options, Gap funding. Creative structures that let you build wealth without massive capital. If you've been waiting for "someday," this workshop shows you how to start now. Click to register.
-Roger
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