Here Im looking for simple formulas you use to invest, and maybe a little explanation if you use a lot of abreviations, as some of our new guests might not know that IMHO means “In My Humble Opinion”.

Here’s one I use:

Do a careful analasys to find what the different home in the farm (neighborhood) you are looking in are selling for ie a couple 3/1’s sold for and average $80k in the last 6 months a 4/1here and there sold for an average of $90k and a bunch of 2/1’s sold for an average of $77kI would feel confortable saying I could sell a 3/2 for $85k So I start looking and what Im looking for is 3beds 1-2(I prefer 3 beds) baths in the price range of $45k needing only about $5k in repairs or what ever the formula TELLS ME.I determined I want a 3 bed, I determined I want 1 or 2 baths I determined the end value is around $80-$85KI use the formula Retail ($80-$85) minus 30%(for profit and error)minus repairs AS LONG AS I AT LEAST CAN POTENTIALLY MAKE $10k In this neighborhood I would use and alway do use the low end.SO break it down

```
$80k retail
minus $24K (30%)
```

minus repairs $9K (for example)

Max purchase price =$47k

What about holding?and realtor fee?that is a guess too.I tend to use 1 year holding and 6% realtor so in the example above.If I was using Hard money at 14% interest and had to hold for 1 year you would probably never find a house cheap enough.But for example sake lets say I pay $4800 realtor fee(6% of $80k) and $600 tax and $700 Insurance for the year thats $6100 you would take away from the 30% so now your down to($80k times 30%=$25,830) $19,730 profit now lets say we hold it for 8 months and we were right on with our rehab and origional thought of 1 year holding and we paid $47k for the home plus an additional 10 for rehab and closing that would be $57k loan for about $450/month X12 months =$5400 you would subtract that from whats left of your 30% profit($26,300 minus $5400) which leaves you with $19,730 minus $5400 =$14,330

in your pocket minus taxes.Not bad for a month and a half work but terrible for a years profit .but if you can sell them in 3 months and do 4 a year not bad ;D