FMV and ARV are NOT the same thing!

Did Matt Larson or even Dean tell you to get your repair costs based on price per sq ft? I don't think I've ever heard a single person on here say that was even a close way to getting accurate repair costs.

Lane look around and read some more you HAVE GOT to do repair costs for EACH INDIVIDUAL property. You're in the success academy ask if they can give you the evaluate a property course if you already don't have it. It really will help believe me! If you haven't already gone through a few properties with your contractor do so asap! Ask him questions and you can even go to your local Lowe's or Home Depot and start looking at the materials and cost of everything (Not at one time of course) and figure out what it will take to repair a kitchen or how much carpet is going to be etc etc etc.

Maybe someone else on here can break it down a little more for you but like I said I have NEVER heard of Matt Larson (your mentor right?) or Dean or even some of the contractors on this site say that you get accurate repair costs by getting accurate numbers based on price per sq ft or even figuring what the value of a property is by doing that.

Good luck!

Evaluating props by price per sqft came from the success academy and my mentor. My repair costs are accurated for my area and I don't base it on the sqft of the whole house, it is based on the sqft of the room needing repaired and what has already been repaired in that room. Carpet is $3.50/sqft here and paint is close to the same. All cosmetic repair is $10/sqft. I know how to get my repair costs and extra expenses. I was just figuring ARV wrong.

Comparable Properties are just that. COMPARABLES !! I would never compare a trashed out REO to a top end remodel. HOWEVER having trashed REOs and shortsales and preforclosure houses listed in your area DOES effect what your ARV is! You must determine what your property will sell for based on a lot of factors like average DOM and Average price reduction over original listed price. Really knowing the trends in the area. Then when you can say "This house fixed up in this way will sell quickly at xxxxx price, THEN you know what the ARV is or for that matter what the FMV is for the property you intend to sell FMV, ARV blah blah, Just terms that don't really matter, all you need to do is figure what the property will actually SELL for and what the ACTUAL cost of the rehab/remodel will be. The rehab/remodel needed to bring the price you are looking to get for the property. Then you know what a realistic offer is, based on the actual market and actual rehab/repair costs.
True Actual ARV based on research times 65% (not a number cut in stone, but close)Minus actual repair costs (2 estimates from contractors, not some silly formula) Then you will have your offer price for that property. Remember, each deal is unique!!

Good luck, you are learning now!!

Michael Mangham
MD Home Acquisitions LLC

I saw your Square footage rehab estimate formula. How do you determine a bad water heater, faulty wiring, structural issues, landscaping, extent of exterior painting, water leaks, roof leaks, drywall damage, plumbing and on and on? These formulas are fine if all you need is cosmetics. They will cost you deals in the long run in my opinion. Besides if you are wholesaling you want to present your buyer with a contractors estimate as part of your professional presentation, not some generic Sq. Ft. estimate. If you are making offers on properties you are going to buy and hold, don't you want exact costs?? What if you make some generic offer, get it and it turns out to be termite infested or has mold. You will never us a silly formula again that's for sure.
Just my opinion on this, you do it how you think you can establish a money making business model.

Michael Mangham
MD Home Acquisitions LLC

for sold comps. You get that by averaging all the sold properties by square foot, and sold price, to come out with the Average price sold per square foot. Then you just multiply it by the current Sq. Ft. of the house you're gonna wholesale, and that should work. I could've told you NOT to include bank reo's, etc., because they will be low, and they will throw off your numbers. There's nothing wrong with a lower offer as long as it was accepted. I agree, comparables are comparables. There will come a point that you you will will find no investor rehabbed homes to compare the house to. Sell fast or a sell now price is what you want to look at, though.

USE DEANS TOTAL VIEW FOR ARV,AND HIS OFFER CALCULATOR. THATS A GREAT TOOL, TO COME VERY CLOSE TO ARV VALUE,MINUS REPAIRS,AND YOUR PROFIT TO FIND OUT WHAT YOU SHOULD OFFER

Michael Mangham wrote:

This house fixed up in this way will sell quickly at xxxxx price, THEN you know what the ARV is or for that matter what the FMV is for the property you intend to sell FMV, ARV blah blah, Just terms that don't really matter, all you need to do is figure what the property will actually SELL for and what the ACTUAL cost of the rehab/remodel will be. The rehab/remodel needed to bring the price you are looking to get for the property. Then you know what a realistic offer is, based on the actual market and actual rehab/repair cost

points we all need to remember to include in our estimates, as well as some new precautions and tips I will surely include. But, Ill bet you didnt know you would be taken to task for giving us good info based on what you have learned. Thanks for taking the time to post it.

Mike (E F Hutton) Lol, as always your nuggets are extremely helpful. Keep'm comimg.

Where is this Offer Calculator you speak of? Can you provide a link or the exact name of it since I haven't found anything called Offer Calculator. Thanks.

The offer calculator is on the left hand column under Student Resources!

If you mean in the Calculators and tools link, then which one in there is the actual offer calculator? because I do not see anything by the name of "Offer Calculator"