OfflineWell here it is the question that is going to make me sound dumb.
You Have a buyer contact you and tells you he wants to buy a fixer, and he wants ARV to be around $250k
How do you figure in the ARV when looking for a house for him..Do you start with house on the market worth $250k
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Can anyone Help with this
You Have a buyer contact you and tells you he wants to buy a fixer, and he wants ARV to be around $250k
How do you figure in the ARV when looking for a house for him..Do you start with house on the market worth $250k
Yes, you'll need to target properties that are SELLING in that price range. Then look to capture with his requirements for min. profit, repairs cost, holding cost, closing cost, money cost (if any for your buyer) and your fee. To determine you offer price.
so typically:
$ARV$
less buyers spread/profit,
less repairs + overrun allowance (min 10% but I like 20%),
less holding/closing/money cost
less your fee
= Max Offer Price
some do different variations of formulas to determine.
ARV x 60-65% - repairs - costs - fees = Max allowable Offer
hope it gives you and idea.
thanks,
jen
dumb or stupid question is the one you dont ask
Mike
https://tvallc.isrefer.com/go/RehabLite/renvestr/ Free tools
Thank You. Im the type that I have to see it wrote down so I can keep going back to it...If some one can throw some numbers together for me that would be great
Can someone help me with numbers..Lets say the seller accepts my offer now i
have a buyer..The property was listed at $215k and I ask for $134,200
So How much do I ask for from my buyer
If someone can help me with this so I can get a idea what im doing
your buyer and you yourself are taking. On to of the repair, holding, closing costs etc, mentioned above. You will subtract from the 215,000 all :
$ARV$
less buyers spread/profit,
less repairs + overrun allowance (min 10% but I like 20%),
less holding/closing/money cost
less your fee
= Max Offer Price
some do different variations of formulas to determine.
ARV x 60-65% - repairs - costs - fees = Max allowable Offer
Without the numbers of ARV & repair, closing, holding and expected profit numbers, the math work can't be done with accuracy.. But just plug in your numbers, and figure it out.
Dream High-Strive for the Stars-Let no one steal your Dreams
StacyKae
I will keep at it..I just subtract 20% for repaires just to get a idea
$215
-15% off the top
my fee -$10k
-20% for repair
Lets just say that is the true # $134k
What would I sell the house to my buyer....$144k
Some variables to consider:
first off asking price is just that ASKING.
Have the agent pull you SOLD MLS comps. last 90 days of actives, pendings and sold.
Identify what is your FMV based on sold comparable to the identified property. sq ft, beds/bth/lotsize, condition etc. nail down your price per sq ft solds times your properties sq.footage to get your FMV
You must find out what the fast cash sale price is.
Determine your DOM - goes in to the calculations for holding cost. 90 days is a lot different that is 180+ etc.
repair cost - identify. get 2 estimates broke down by materials and labor for comparison and doing your own due diligence. this should be a comparable rehab to the area
you have to know what your buyer is looking for. you have to identify his spread and/or profit needed (walk away) some are fine with $20k some need net $50k++, etc makes a difference in your calculations.
find out if he's cash to acquire and rehab or will be he using HM or PM his expense (carrying cost) should be accounted for also to make sure he nets what he want to net.
these are the plug #'s that go into the formula. The formula is the mold. that doesn't vary, if the property fits it fits, if not move on. The formulas and contingencies are for protection. Those don't change, only properties do.
God bless,
Jen