OfflineI have been following an offer formula most of my investing career. Some have asked me what the formula is. I have listed my formula below. There may be some that use a different formula or disagree with me but it works for me. Enjoy:
"-" stands for subtract
Holding costs: I use value times 1.2% because I have seen that this will cover my mortgage, taxes, insurances and utilities for one month. The amount that is calculated actually covers more than I need but I include it to take care of my what ifs.
I use this formula on properties I rent or flip because I want to build in profit regardless of whether or not I rent. In addition to the formula if the property is going to be rented it has to cash flow. If the property does not cash flow with my offer I go low enough the property will cash flow or at least cut even.
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One realtor send me 6 properties what is the best and easiest way to evaluate it please
"-" stands for subtract
Value of the Property
- Profit of at least 10%
- Fix up costs
- Holding costs (value of the property x 1.2% x number of months I will hold the property to sell or rent)
- Closing costs (3% of the value)
- Realtor Fee (6% of the value)
= the most I will offer on the house.
Holding costs: I use value times 1.2% because I have seen that this will cover my mortgage, taxes, insurances and utilities for one month. The amount that is calculated actually covers more than I need but I include it to take care of my what ifs.
I use this formula on properties I rent or flip because I want to build in profit regardless of whether or not I rent. In addition to the formula if the property is going to be rented it has to cash flow. If the property does not cash flow with my offer I go low enough the property will cash flow or at least cut even.
I am determined dedicated and will make it in real estate thanks Dean
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Is there a formula for finding the FMV when you don't have any or only one reasonable comp for the area. If I am going to subtract all this from the FMV I need to have an accurate FMV, right? Do you have any other suggestions on finding a price for the house?
Amanda
A BPO (Broker Price Opinion) can be arranged through a local realty broker, sometimes for free. Realtors can also generate a CMA (Comparative Market Analysis) for you too.
Carl
http://freedomstrategiesunlimited.usapropertywholesale.com
This is a good sound formula i just finished the DG 3 day seminar and it almost matches it with the exception of the 3% to 6% margin for error thanks
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