Property background
A Wholesale Opportunity That Looked Close Enough to Investigate
A wholesaler representing Fast Cash Holdings approached us about purchasing 203 Moores River Dr, a three-bedroom, one-bathroom single-family house in Lansing. The asking price was approximately $95,000, and the property was presented with an after-repair value, or ARV, of approximately $180,000.
The information and photographs supplied to us showed renovation work that remained incomplete. Our first impression was that the economics appeared marginal, but the numbers were close enough to justify a preliminary review of the claimed resale value.
We did not purchase the property, complete the renovation, or accept the represented ARV. This case study documents a preliminary investment analysis—not an appraisal, contractor estimate, completed acquisition, or judgment about the wholesaler.
An investment should work because the underlying assumptions are reasonable—not because the investor selects the most optimistic assumptions available.
1 · Initial underwriting
The Initial Numbers: A $95,000 Purchase and $180,000 ARV
We began with the wholesaler's represented $180,000 after-repair value, approximately $4,000 in outstanding property taxes, a 10% allowance for holding and selling costs, and a $40,000 target for projected investment profit given the project's risk, capital commitment, work, and uncertainty.
| Item | Amount |
|---|---|
| Claimed after-repair value | $180,000 |
| Holding and selling allowance (10%) | −$18,000 |
| Required projected profit | −$40,000 |
| Available before purchase and repairs | $122,000 |
| Wholesaler asking price | −$95,000 |
| Outstanding property taxes | −$4,000 |
| Remaining renovation budget | $23,000 |
Calculation: $180,000 × 90% − $40,000 − $95,000 − $4,000 = $23,000. The $40,000 figure was a target, not guaranteed or earned profit.
The $23,000 was not an independent estimate of the work required. It was simply the amount left for renovation if every other assumption proved correct. A budget created by subtracting expenses from an optimistic ARV is not the same as a contractor's estimate of what the property actually needs.
Based on the supplied photographs and description, we believed the unfinished work could consume that amount or more. The deal was therefore marginal before we challenged the ARV.
2 · Renovation scope
What Work Was Still Needed?
According to the wholesaler, the remaining work included:
- Kitchen countertops
- Additional finishing work
- Second-floor carpeting
- Lower-level floor refinishing
- Interior painting
The house appeared to have received some renovation work already, but we did not verify that this list captured every remaining item. We also did not independently confirm the condition of the roof, foundation, electrical, plumbing, or mechanical systems.
Renovation budgets can expand when additional issues are discovered. When a project begins with limited remaining margin, even ordinary cost overruns can materially change the outcome.
3 · Resale evidence
The Comparable Sales Did Not Clearly Support $180,000
We reviewed five closed comparable sales from the supplied comparative market analysis. The adjusted values ranged from approximately $54,000 to $180,000, with a simple average of approximately $130,000.
| Comparable | Sold price | Adjusted price |
|---|---|---|
| 408 Smith Avenue | $190,000 | $174,320 |
| 227 Woodlawn Avenue | $89,900 | $93,980 |
| 1728 Davis Avenue | $180,000 | $179,540 |
| 316 Smith Avenue | $148,000 | $148,400 |
| 1824 Davis Avenue | $50,000 | $54,160 |
The approximately $130,000 simple average is descriptive, not a definitive ARV. Comparable adjustments and the subject property's final condition still require judgment.
The two highest sales showed that the broader neighborhood could support prices near $180,000 for certain homes. They did not establish that 203 Moores River would achieve the same result. Size, renovation quality, condition, layout, functionality, immediate surroundings, buyer expectations, and overall marketability can place nearby houses in different market segments.
4 · Sensitivity analysis
What Happens If the ARV Is $170,000 Instead?
We stress-tested the represented value while retaining the same 10% holding-and-selling allowance, $40,000 projected-profit target, $95,000 purchase price, and $4,000 tax obligation.
| Assumed ARV | Remaining renovation budget |
|---|---|
| $180,000 | $23,000 |
| $175,000 | $18,500 |
| $170,000 | $14,000 |
| $150,000 | −$4,000 |
The negative result at $150,000 means the project falls $4,000 short of the target before allowing anything for renovation.
A $10,000 reduction in ARV from $180,000 to $170,000 reduced the available renovation budget by $9,000 under this model. At $170,000, only about $14,000 remained for unfinished work. That appeared too narrow given the reported scope and the possibility of additional discoveries.
The investment depended heavily on achieving a relatively optimistic resale price. The $40,000 allowance was a target for risk and effort—not money already earned or a guaranteed return.
5 · Condition-based evidence
Why the $50,000 Sale Deserved Attention
1824 Davis Avenue originally asked $55,000, sold for $50,000 after 130 days on market, and carried an adjusted comparable value of approximately $54,160. It was reportedly partway through renovation when it sold.
We did not treat that property as identical to 203 Moores River or allow one sale to determine the subject's value. It was nevertheless a useful counterpoint to the highest renovated sales because the market can value partially completed projects very differently from finished, retail-ready homes.
Based on our preliminary review, we believed the subject property's condition-based market value could be closer to approximately $50,000–$60,000 than the $95,000 asking price. That was an acquisition judgment, not a formal appraisal or a claim that the house could never sell for more.
6 · Secondary reasonableness check
A Second Check: Historical Value and Improvements
We also considered historical valuation information from the property's 2018 purchase, changes in assessed and state equalized value, broader appreciation, and the apparent value of renovation work already completed.
The source analysis referenced state equalized values moving from approximately $24,000 to $43,000. It also produced an illustrative appreciation-based estimate near $62,000, then added approximately $15,000 for apparent improvements to reach a rough condition-based indication near $77,000–$78,000.
That exercise had important limits. Tax assessments and state equalized values are not direct substitutes for market value. A change in assessed value does not prove an equivalent change in market value, and the $15,000 improvement figure was not verified construction spending.
The historical approach supported caution about the asking price, but it did not independently establish a precise value. Comparable sales and the subject property's actual condition remained more important to our decision.
7 · Acquisition decision
Our Decision: Pass at $95,000
The opportunity required too many favorable assumptions to justify the wholesaler's asking price:
- The claimed $180,000 ARV appeared optimistic for the subject property.
- The highest comparables were not necessarily representative of what this house could achieve.
- The remaining renovation budget was already narrow.
- A lower ARV quickly eliminated renovation margin.
- The approximately $4,000 tax obligation reduced the available capital further.
- The investment did not leave enough margin for our required risk-adjusted return.
We declined the opportunity at approximately $95,000. Our preliminary analysis indicated an acquisition price of approximately $42,000.
We did not fabricate a detailed formula for that figure because the underlying repair and transaction assumptions were not complete enough to support one.
The indication was not a judgment that the property could never sell for more. It reflected what we believed we could pay under our strategy and margin-of-safety requirements. Another buyer with different repair costs, financing, holding period, exit plan, or return requirements could reasonably reach another conclusion.
8 · What the analysis means
What This Means for Lansing Homeowners
A homeowner may hear several different numbers for the same house. An agent may estimate what it could sell for after repairs. An investor may estimate what can be paid after accounting for repairs, transaction costs, financing, and risk. A wholesaler may market an opportunity using an optimistic after-repair value. Those numbers answer different questions.
The price a renovated house might achieve is not the same as the value of that house today, in its current condition.
The amount an investor can responsibly pay depends on the property's current condition, comparable sales, repair requirements, probable resale value, holding and transaction expenses, risk, and required return. That process is why a direct offer can differ from a projected renovated value.
We do not need to buy every property. Sometimes the numbers do not work. Sometimes listing may make more sense for the owner. Sometimes another buyer may be better positioned to purchase it. The point is to understand the house, explain the tradeoffs, and make an informed decision.
For a complementary case, read how the owners of 639 N Hayford chose to list instead of accepting our direct offer. Homeowners can also review how we evaluate a house, compare a direct offer with listing, and explore our 3,178-listing Greater Lansing market study.
Transparency note
This case study documents a preliminary review of a real wholesale opportunity. The valuation, repair margin, historical cross-check, projected profit, and indicated acquisition price are estimates and underwriting judgments, not an appraisal, contractor estimate, guarantee of value, offer to purchase, or completed transaction.