Is there a magic formula I could use?

Use a realtor to run your comps. The experienced ones will have the best knowledge of prices.

As for finding properties; market, market, and market some more. You need to use every resource you have to find properties. Also it would be good to find some rental properties for yourself to carry you through the deal "dry spells". You could put up the cash yourself or partner with someone.

RENinja

You have discovered the KEY and the most difficult part of this business. Finding the deal that your buyers will take that you can make money on also. Like I always say, everything else is easy.

I determine ARV by looking at sold comps from the last 90 days. Currently listed comps and under contract comps.

If I am looking at a house that will be fixed/flipped I don't use REOs and short sales in my comps. I look at rehabbed/remodeled properties to see what they are selling for. What is the average DOM? They have to be real comps. Sometimes neighborhoods can change in 1 block, or be street to street. Just going out a 1/2 mile can be deceptive to say the least. So it is all about knowing the neighborhood, what houses are selling for in the condition you plan to sell yours in and how long they take to sell.

If its is a buy and hold then you need to know area rents and demand and how much it will take to get the property rent ready. What is the potential cash flow?

This is a science itself and critical to a successful investor.

Michael Mangham
MD Home Acquisitions LLC

There is no MAGIC formula.....the formula is to get out in the field DAILY if possible and KNOW YOUR MARKET...like Michael says.....MOST of the time.....and im being honest......the comps are too far away or not the same sq ft or same size or condition.sometimes u can use them but in my experience in my area .....LEARNING the sold comps AND MOST IMP for me to LEARN my market.Ivknow u r just starting and NOW is the best time to eat that elephant....one bite at a time..........good luck....way to GET IN THE GAME!!
JAY

To use ROI you must know what the property will sell for right? Otherwise how do you calculate ROI? You are right about ROI being what this is all about. However you must know the numbers in order to arrive at ROI!

Maybe I misunderstood your post.

Michael Mangham
MD Home Acquisitions LLC

This thread reminds me that in my neighborhood I have a realtor that often sends out comps for that area, I wonder if I contact him if he can give me comps for any other areas that I might want and let him know I am an investor and maybe we can work together at some point. Maybe he is newer or something or is there a reason they send these out to homeowners other than gauging what your house could be potentially worth if you want to sell ,or if you may be interested in neighboring properties?

Just work smart and understand the business.

That's half the battle

Put the 14 day goal off the table; if it happens from beginning to end, great, but realistically don't do anything that will rush and mess you up and have you lose what you had coming to you.

Use some of what everyone above mentioned plus main common sense and things SHOULD work out well.

Thank you everyone. You are all awesome!

ARV = x
-65% Of ARV = x
-Repairs = x
-Assignment Fee = Max Offer
90% of MAX = Starting Bid!

Comps, SOLD, RETAIL CONDITION, LAST 90 DAYS, 30 Days on market or less.

I say:
consult at least 3 local realtors in the area/neighborhood you want to buy in. Get each to send you a CMA report (comparative market analysis) containing at least 3 currently listed similar properties and 3 recently sold properties. That should give you a good point of departure using calculations similar to lanemccaw's comments above. Also, bear in mind Michael's always-valueable comments above.

I say 3 because I've seen realtors send me up to 14 properties in dissimilar neighborhoods with outrageous comps not even CLOSE to the square footage of the property in question. Now I know some properties are quirky (strange shaped lots, on the edge of one town versus another, etc.), but this is why you need several CMA reports. It also helps you figure out who is a lazy realtor just trying to score business versus actually knowing the neighborhood well.

Now realtors can be like a dog with a porkchop and very pesky trying to get your business, so know that in advance and don't let them force you to feel beholden to them. Gathering correct information is critical in setting your purchase and sale prices for properties.

Hope this helps!

Good luck!

JennyInMalibu

http://westernrealtyca.com

I live in a pretty big area, and home prices range per nieghborhood, and sometimes by they house next door.

For example:

a home is listed for $345,000
The home next door just sold for $285,000
The neighborhood right next to this one has an average selling price of $540,000
Then you drive a mile down the road and the homes there are selling for $110,000-$135,000.

I live in stafford, va. The whole county is like this.

This makes for a frustrating time finding something i can work out with my given situation.

I am takkng all of this and putting it to work

think Stafford, VA is bad; you ought to try parts of FL: car wash, fast food restaurant, million dollar home, mobile home park, as they line up going down the road. Zoning is a concept that has come late to the Sunshine State! LOL.

So i have spent the majority of the day researching my area, and i now feel like i live in foreclosure city. There is also a large amount of for sale by owners as well.

Is there a way to assign a foreclosure with nothing up front or even at all.

I like to be creative. Lets see where we can go with this.

My everlasting gratitude goes to you all.

Finding sellers is number one, then making offers, First off get your self some bandit signs, get them out in the area your interested in, Contact a realtor and ask for expired listings for an area your interested in over the past 90 dfays, look for keywords, reduced price motivated seller etc any thing that says I'm motivated you want on your list, next send out 20-40 what ever you feel comfortiable with sending out yellow letters to these expired listings, run a classifled adv in a shopper newspaper in your area. Get ready cause the phone will state ringing and people will begin telling there story about how they want tosell there house to you. Marketing you have to market market,, your self pass out bussiness cards etc. tell everybody you come in to contact with that you buy and sell houses, next step start making offers and doing deals, Action+knowledge= Success...$$$$$$$$..... PS stop thinking about it and just do it.....

Here's a Offer Formula that you can use. Make sure you add in the profit for the end buyer if you are wholesaling it.

Offer Formula
http://www.deangraziosi.com/node/3975

You guys are the best. Thank you again.

How about doing an assignment deal ouside of my home state?
Is it possible to do that? What forms would i need, if possible?

keep it simple

ARV x 65%

Minus Repair Costs

Minus Assignment Fee

Max Offer.

yes, you can do out of state assignments, but you probably need to set up a power team in the other state, so that they can look and assess the property for you, and you will still need to run the numbers to make sure it will be a profitable deal; read some of Carol Stinson's threads... here's one link
http://www.realwholesaling.com/uncategorized/how-to-flip-houses-in-any-s...

Valerie

Found a fsbo

Listed $174500
ARV-$181575
Last sold 1988 $82000

There is a good chance that the property has a very low balance or no balance at all. The list price couls be all equity.

ARV(181575)X0.65-(REPAIRS)5000-(FEE)5000=$108023.75 MAX OFFER

Does this sound like a deal?