What is the best way to calculate how to write an offer on a home? Do you use 65-70% LTR, OR 65-70% ARV? If you use LTR method, 70% is that based off the seller’s current asking price, or based off basically the ARV? Hopefully I stated that in not a too confusing matter.
i think it is (70% x ARV) minus repairs
create a simple excel sheet where you can plug in rehab costs, carrying costs, closing costs, etc. Then you can figure out an offer.
You can calculate it anyway you want, just make sure you figure in ALL your costs.
So it would work like this then? If the ARV is $150,000 and to get that value my rehab costs would be $25,000. So I would figure $150,000 * 70% = $105,000 - $25,000 (rehab). My offer would be $80,000. I know there are other variables to take in to consideration, but is that a basic formula?
yup. i believe thats what most people do.
i use an excel sheet and plug in the ARV, rehab costs and a price that i may pay for it. I can adjust the realtor commission and the time i will hold it on the fly. Then it tells me how much profit i will make after carrying costs, closing costs, realtor fees, rehab and it tells me how much profit if I use conv or HML financing. Then i change my price to reflect the profit i want to make.