There is a house in an area where the comps are pullng between 92k-109k. However b/c this is a warzone not many homes have sold recently the comps are mainly from late 2007(oct-dec) If i’m not mistaken the formula to determine the offer price would be as follows: ARVx65%-repair costs=highest price to buy property. The land is worth 12,000. I’m not sure how to estimate the repair cost but the home has been abandoned for 3 years, and looks like it needs to be completely gutted. Any suggestions or creative ways of wholeselling?
Mbuford a word of caution do not use comps from last year banks or whomever ends up putting money for this deal will want to look at comps from the last few monts. Now if no recent sales in the area, do not use the 65%ARV formula, instead reduce the formula by 10-20%. Good luck.
Your formula sounds pretty good however, it is missing one key issue…
ARV x (50-70%) - Repairs - [u]YOUR PROFIT[/u] = MAO (maximum allowable offer)
Hope this is helpful.
John
Nope…conventional wisdom says that the “X (50-70%)” IS your profit!
You’ve gottten to the point that you’d NEVER find a property!
Keith
Before making any offer I would recommend that you have buyers lined up ahead of time. Warzone areas require a very specific type of buyer so I cannot recommend finding them ahead of time enough.