For the purpose of this book, I define the term current market value as the value of a property after deducting all of the costs associated with getting the property into a marketable resale condition. To illustrate, a couple of years ago, I bought a one-year option for $3,500 on a vacant, run-down single-family house, which was located in an emerging commercial area of Brandon, Florida, a suburb of Tampa. The out-of-town owner initially asked $85,000 for the property. I calculated the property's current market value to be right around $55,000 after deducting $30,000 in needed repairs and upgrades. And that is what I offered her for it. She made a counteroffer of $65,000, which I accepted. I turned around and had the property rezoned for use as a professional office and sold my option six months later for $25,000. But I would have never been able to realize a $21,000 profit on the deal if I had paid her initial asking price of $85,000 instead of $65,000, which was closer to my estimated current market value of $55,000.
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