Max Bid Calculator Skill

Component 2: Repairs

Sources:

• Property age/condition assessment
• BCPAO photos inspection
• Drive-by evaluation
• Comparable properties Conservative Approach: Round up, not down Example: Estimate $15-20K → Use $20K

Component 3: Holding Costs

Fixed Amount: $10,000 Covers:

• Property taxes (6-12 months)
• Insurance
• HOA fees if applicable
• Utilities during renovation
• Carrying costs

Component 4: Profit Buffer

Formula: MIN($25,000, 15% × ARV) Examples:

• ARV $150K → 15% = $22.5K → Use $22.5K
• ARV $200K → 15% = $30K → Use $25K (capped)
• ARV $500K → 15% = $75K → Use $25K (capped)

Reasoning: Guarantees minimum profit while capping risk

Complete Examples

Example 1: Lower-Value Property

ARV: $180,000
Repairs: $15,000
Holding: $10,000
Profit Buffer: MIN($25K, 15% × $180K) = MIN($25K, $27K) = $25K

MAX_BID = ($180K × 70%) - $15K - $10K - $25K
        = $126K - $15K - $10K - $25K
        = $76,000

Example 2: Higher-Value Property

ARV: $450,000
Repairs: $35,000
Holding: $10,000
Profit Buffer: MIN($25K, 15% × $450K) = MIN($25K, $67.5K) = $25K

MAX_BID = ($450K × 70%) - $35K - $10K - $25K
        = $315K - $35K - $10K - $25K
        = $245,000

Example 3: Heavy Repairs

ARV: $300,000
Repairs: $60,000
Holding: $10,000
Profit Buffer: MIN($25K, 15% × $300K) = MIN($25K, $45K) = $25K

MAX_BID = ($300K × 70%) - $60K - $10K - $25K
        = $210K - $60K - $10K - $25K
        = $115,000

Bid/Judgment Ratio Analysis

After calculating max bid, compare to judgment amount:

RATIO = MAX_BID / JUDGMENT_AMOUNT

Decision Rules

BID (Ratio ≥ 0.75):

• Strong equity cushion
• Proceed with confidence
• Auto-approve for bidding

REVIEW (Ratio 0.60 - 0.74):

• Marginal opportunity
• Human review required
• Flag for Ariel's approval

SKIP (Ratio < 0.60):

• Insufficient margin
• Not worth risk
• Auto-reject

Example Ratio Calculations

Scenario 1: Strong BID

Max Bid: $245,000
Judgment: $280,000
Ratio: $245K / $280K = 0.875 (87.5%)
→ Decision: BID
→ Reasoning: 87.5% ratio = strong value

Scenario 2: Marginal REVIEW

Max Bid: $175,000
Judgment: $260,000
Ratio: $175K / $260K = 0.673 (67.3%)
→ Decision: REVIEW
→ Reasoning: Close to threshold, needs human judgment

Scenario 3: Clear SKIP

Max Bid: $130,000
Judgment: $285,000
Ratio: $130K / $285K = 0.456 (45.6%)
→ Decision: SKIP
→ Reasoning: Insufficient equity, too risky

Output Format

{
  "arv": 400000,
  "repairs": 35000,
  "holding_costs": 10000,
  "profit_buffer": 25000,
  "max_bid": 245000,
  "judgment_amount": 320000,
  "bid_ratio": 0.766,
  "decision": "REVIEW",
  "reasoning": "76.6% ratio - marginal opportunity, human review recommended"
}

Integration with Pipeline

# Stage 8: Max Bid Calculation
calc_result = max_bid_calculator_skill.calculate(
    arv=arv_estimate,
    repairs=repair_estimate,
    judgment=auction_judgment
)

if calc_result['decision'] == 'BID':
    # Proceed to report generation
    generate_report(calc_result)
elif calc_result['decision'] == 'REVIEW':
    # Flag for Ariel's review
    flag_for_human_review(calc_result)