3Bd., 1Ba, home in Missouri... Go for it or no?

I would use the 70% rule to see if it's worth it.

Trina

I wouldn't offer more than $55,250 on it, and that's IF it was in perfect shape. So subtract whatever repairs are left and the amount you want to make on the deal from $55,250 .

If you think about it, the absolute HIGHEST you really want to go is 65% of ARV if you plan on wholesaling, and you said ARV is $85,000 right? 65% of 85 is 55.25. If you want to make $5,000 and there's $5,000 repairs left, don't offer more than $45,250.

Investors typically aren't the sellers you are going after, because they usually aren't too desperate to sell unless they are losing money on their rentals for some reason.

Wholesaling usually requires you to offer 65% of the ARV at most (probably closer to 50-60) because you have to sell it FAST before the contract expires. If you told me you planned on keeping it as a rental for yourself, you wouldn't have to offer as low as you would with wholesaling because you would be more concerned about cashflow instead of equity. Although instant equity is always nice in any situation

Also, don't get hung up on one deal if it doesn't work out. There are millions of homes out there!

Best of luck!

EDIT: I know the current rule of thumb is 70%, I just prefer to be safe knowing I have that extra 5%. So go ahead and try 70% if you have the buyers to back it up. Sorry for any confusion!

Oh and I forgot to mention (for anyone that doesn't know)

If the above numbers were correct and he did lock it up for $45,250. He would turn around and market it for $50,250 (if he wanted to make $5,000). That way the end buyer has that $5,000 discount to repair it up and still have that 35% discount.

I was thinking about 70% since others use the same formula, as I've been taught to use. The owner's in the process of fixing the rest of the house now, & no repairs will be needed.

Dom, I almost forgot your partner lives in Independence I think, am I right?

So has the 70% rule changed?

I don't think the 70% rule has changed, maybe I'm just being a "tight-wad" hahaha

But yeah, a 70% offer would probably work for wholesaling too, just hope hes desperate to sell! If he's making full repairs he cant be hurting too badly for money though. Know what I mean?

And yes she does live in Independence, MO

There's nothing wrong with right wads. lol

Dallas Sid you get a chance to read the pm question i sent you.

Trina

For some reason my question wont go thru. I have two fixer uppers that I want to turn over to a investor . Their fixer uppers. What forms would I use. Also what % would I ask for.

If you're wanting to bird dog, you need a finder fee agreement between you and the buyer & let the potential buyer take care of the rest.

If you're wholesaling for more money, you need a Purchase Agreement between you and the seller, Assignment of Contract between you and the buyer (so the buyer can pay you), and another purchase agreement between you and the buyer for the full amount including your assign fee. Also, a non-refundable earnest money check of $1k would be nice to take to the title company. In wholesaling or Bird dogging, there's no real percentage. If the deal is right and the numbers work for the buyer, you have a great deal. Then you take all the paperwork up to the title co. & they handle the rest. If they need any additional paperwork, they'll let you know. When it comes time to close escrow, have the title send you a rough draft of the Hud-1 Statement, because you want to look it over for errors (if any) and have them corrected.

I hope this helps you somewhat.

I like that explanation, Just-E ~ It made me laugh & it makes sense to hit high & low. Thank you!

It did, but what is the 1k for.

sometimes BOTH

You have to run the numbers!!!! Just don't be GREEDY and kill the deal, make a little off the top and move on to the next one

I probably one of the biggest tightwads out there!!!

Trina, it's your buyer's earnest money ~ basically 1 way to know they are a true buyer & they can close a deal.

I wouldn't have though that about you, Mike. You're just protecting your investments.

propose both, let the seller choose... if he doesn't, move on...

remember: you fall in love with the numbers, not the house!

Wishing you success,

Valerie