Always follow your offer formula, then as far as percentage or profit margin your buyers want will determine what kinds of discounts you will be asking for in your market. I assume you are wholesaling, so let your buyer determine what will work. The numbers have to work and it is up to your buyers to tell you what they want.
Offer Formula:
UPDATED FORMULAS TO FOLLOW WHEN COMING UP WITH OFFER PRICE:
Birddog/Assignment of Contract
—Retail after repair value (ARV) $120,000
1. 30 Day ARV (discounted to sell quick) $100,000
2. % Buyers purchases of ARV (.70) $70,000.00
(or insert specific profit number buyer wants. Ex. $20k)
3. Repairs $15,000.00
Investor Pays… $55,000.00
4. Your Profit $2,000.00-$5,000.00
Max Offer $50,000-$53,000
MINUS 5%-10% for negotiation room and start your offer from that point = starting offer at $45,000-$47,700
Double Close
— Retail after repair value (ARV) $120,000.00
1. % Buyers purchases of ARV (.70) $70,000.00
(or insert specific profit number buyer wants. Ex. $20k)
2.Repairs $15,000.00
3. Investor pays… $55,000.00
4. Your Profit $7,500.00
5. Transactional Funding $3,500.00
Preliminary Total $44,000.00
6. Closing Costs (3%) $1,320.00 = (44,000.00 x .03)
Max Offer $42,680.00
MINUS 5%-10% for negotiation room and start your offer from that point = starting offer at $38,412
Offline
If you are referring to percentages, ask at your REI clubs.
Karen
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Karen
Hi AMVG22,
Always follow your offer formula, then as far as percentage or profit margin your buyers want will determine what kinds of discounts you will be asking for in your market. I assume you are wholesaling, so let your buyer determine what will work. The numbers have to work and it is up to your buyers to tell you what they want.
Offer Formula:
UPDATED FORMULAS TO FOLLOW WHEN COMING UP WITH OFFER PRICE:
Birddog/Assignment of Contract
—Retail after repair value (ARV) $120,000
1. 30 Day ARV (discounted to sell quick) $100,000
2. % Buyers purchases of ARV (.70) $70,000.00
(or insert specific profit number buyer wants. Ex. $20k)
3. Repairs $15,000.00
Investor Pays… $55,000.00
4. Your Profit $2,000.00-$5,000.00
Max Offer $50,000-$53,000
MINUS 5%-10% for negotiation room and start your offer from that point = starting offer at $45,000-$47,700
Double Close
— Retail after repair value (ARV) $120,000.00
1. % Buyers purchases of ARV (.70) $70,000.00
(or insert specific profit number buyer wants. Ex. $20k)
2.Repairs $15,000.00
3. Investor pays… $55,000.00
4. Your Profit $7,500.00
5. Transactional Funding $3,500.00
Preliminary Total $44,000.00
6. Closing Costs (3%) $1,320.00 = (44,000.00 x .03)
Max Offer $42,680.00
MINUS 5%-10% for negotiation room and start your offer from that point = starting offer at $38,412
Hope that helps.
Thanks,
Shah