OfflineHey guys I think I have spent way too much time over analyzing stuff that I have totally confused my self. I'm looking at a property and I'm trying to figure out how much to offer. The house is a 3 and 1. I was originally was gonna offer .65-rehab. My wife read the 30days to realestate cash and the formula there ia different. its basically 15% minus rehab and profit is separate.
Lets keep this simple if this were your deal for a wholesale and say it needed like 10k of work what would your max offer be say your trying to make 5k. I really need to get the ball here.
Thanx guys.
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Oh I forgot the house is listed for 126,475 but according to the comps its worth about 157,765. It needs less than 10k but thats what I have budgeted for it.
Thanks again.
You get the ARV times 65% minus repairs minus your fee equals your offer price.
Ya seems right %65 off fmv -repairs
yesterday is history, tomorrow is a mystery, but today is a gift. That is why it is called the "present."
"Be not afraid of growing slowly; be afraid only of standing still"
Hey! Congrats for taking ACTION!
Ok, there are various methods, but here is the Basic DG / Matt way:
ARV (be conservative here! do NOT use a high comp) =
Comp---$157,000 X.85 (15% for Costs (closing, advertising, commissions, etc for WHEN the buyer sells it), soooooo
$133,450
Less--- $10K repairs
Less--- $5K profit for you
Less--- $15-$20K profit for your buyer
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The offer would be $98,450
How does that look? It is 77.8% of the list price; that's not a real aggressive offer, I would probably go lower and/or double check the comps, the repair amount and run the formula again....What are the recent wholesale (low sales, sales of REOs in the comps)? That is the figure you need to buy below of because that is what your buyers will pay. Btw, ask your buyer WHAT they will pay, ask their formula! They will likely say they want it at 65% of ARV less repairs, so you need to A) buy it at a discount deeper than that to create your fee, or B) ask your buyer if you get it at their price, what will they pay you
Figure out what works best for you.
Do it!
-Tina
Never, Never, Never Quit, N3Q
"Nothing happens until you place an offer."
"Skip Deal #1, go straight to Deal #2; it's so much easier."
"There is nothing so useless as doing efficiently that which should not be done at all." — Peter F. Drucker... so, "Don't sweat the small stuff." -R.Carlson. "The greatest mistake you can make in life is to be continually fearing you will make one."~E.Hubbard, The Note Book, 1927...so, Do it for the right reason and "Do it with a headache!" - Dean Graziosi, Weekly Wisdom #176
Thank you guys so much for clearing it up for me.
I'm hoping to start making offers A.S.A.P. My realtor wants to start a few at a time but I'll bet once we get a deal done she'll come around.
Tina, I have written down your formula that you have shared. Thank you for making it so clear. One question though, I continue letting myself fall behind from even making my first deal due to the proof of funds. I do not want to use my own funding, but does this mean that if I ask for a transactional loan (I think that's what it's called), I would have to use it for only the house I requested the proof of funds for?
This may be a silly question, but I am not quite sure how the proof of funds letter works if the offer is not accepted on the 1st property I bid on, but my third property bid (for example)was accepted. Would I be able to use it on any one of the bids that is accepted? I hope I didn't confuse you with my question.
Use coastalfunding.com...They will provide Proof of Funds (POF). It is free to utilize.
That is, until you actually need their services for transactional funding in a deal.
Their fees are on their website.
>>> Go to: www.totalviewrealestate.com
>>> scroll down to bottom of the site...
All kinds of goodies there! ;D
Thanks to Dean for that! ~Hope this helps!
Happy Prospering! ~Kat, Liberty Residential Investment Acquisitions
• "To every thing there is a season, & a time to every purpose..." ~Ecclesiastes 3:1-8
• "Inaction breeds doubt and fear. Action breeds confidence and courage. If you want to conquer fear, do not sit home and think about it. Go out and get busy!" ~Dale Carnegie
• "Begin, be bold, and venture to be wise." ~Horace
• "Never, never, never give up." ~Winston Churchill
• "Whatever you do, or dream you can, begin it. Boldness has genius and power and magic in it." ~Johann Wolfgang von Goethe
PS. A proof of funds letter shows you are, in fact, a qualified cash buyer.
It's verification of funds to purchase...it allows you to present yourself as a serious buyer.
This will allow you to put in offers for properties through your agent.
Be sure to actually have CASH buyers in your pocket, ready to buy at a moment's notice.
Maintain a strong buyer's list. Have ready-to-move CA$H investors on hand.
Happy Prospering! ~Kat, Liberty Residential Investment Acquisitions
• "To every thing there is a season, & a time to every purpose..." ~Ecclesiastes 3:1-8
• "Inaction breeds doubt and fear. Action breeds confidence and courage. If you want to conquer fear, do not sit home and think about it. Go out and get busy!" ~Dale Carnegie
• "Begin, be bold, and venture to be wise." ~Horace
• "Never, never, never give up." ~Winston Churchill
• "Whatever you do, or dream you can, begin it. Boldness has genius and power and magic in it." ~Johann Wolfgang von Goethe