How Real Estate Investors Price Distressed Properties

Understanding what goes into a fair cash offer

When you’re selling a home that needs work, you might wonder: “How do investors come up with their offers?”. Let’s break it down. The process is more thoughtful—and more math-based—than you might think.

1. After-Repair Value (ARV)

This is the estimated value of your home after repairs and updates are complete. Investors look at similar homes in your area that have sold recently in great condition to set a benchmark.

Example: If a fully renovated home nearby sold for $300,000, that becomes our ARV target.

2. Repair & Renovation Costs

Next, we estimate what it will take to bring your home up to ARV value. This may include:

• Major repairs (roof, foundation, plumbing)

• Cosmetic updates (paint, floors, kitchens, baths)

• Cleanup and professional labor

The bigger the renovation, the more it impacts the offer.

3. Holding & Selling Costs

These are the costs we take on while preparing and reselling the home:

• Property taxes and insurance

• Utilities and maintenance

• Closing costs and agent commissions (when we resell)

These numbers help shape what we can reasonably offer.

4. A Responsible Profit Margin

Like any business, investors build in a margin for time, risk, and project management.
We never overreach—but we do plan for surprises like delays, interest rates, and changing markets.

What This Means for You

When you get a cash offer from True Texas Properties, it’s based on:

• The true potential of your home

• Accurate costs to improve it

• Local market trends and data

We’re not guessing. We’re working from facts—and we’ll walk you through every number if you’d like.

Want to talk about your property?

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