This is my first time on the forum and I gotta say I love it!!
Real quick and dumb question but I gotta know 100%, on the formula for MAO, the 70% x Price is to factor out the 30% ROI for the investor correct??
That would mean after calculating everything else into this formula if there is any money left over it would be mine?
This scenario is that I am finding an investor to supply the capital and I will coordinate everything else
Excellent thank you. I do have 1 more question, if you are working with an investor supplying the capital for a flip that most likely wants to see a 30% ROI before expenses do you put this into the MAO formula that Richard Roop explained? If so, do you just calculate the difference of the $20,000 Equity Spread from the 30% to the Investor?
I think you’d be best served to ask that investor to elaborate on exactly what he meant by that. His method of determining exactly what he’s looking for will very likely differ from what anyone here will tell you.
But in general, don’t make this too difficult. Just get a house under contract for as far below MAO as you can, preferably with a $10 deposit, and then market it to cash buyers. Worst case scenario you lose a whole $10 if you can’t sell it.
remember what the banks ask for and what they will accept are two different things, I had one that wanted $5k EM for a $60k house, I laughed,they finally accepted $750
Hmmm good to know Andy, I will keep that in mind.