Does it need repair work?
If it does you have to factor that in into your price.
I factored that in, with multiplying 1929 sq ft of the home by $8/sq ft…looks decent ,ust cosmetic care ,curb appeal and some new paint.
So I added $15K + asking price of $199,000= $214K
Comps show average of $205 .
MOA=70% x $214K = $149.8
96 Days on the market.
This is what I get.
Some use the 70% rule others 65%
Using the 70% rule I get this
- 15k (8 x 1929 sq ft) repairs
- (your fee)
This is how I know the wholesale formula. Someone on this forum said something about taking a percentage depending on the equity but I don’t know how that method works.
So thats my two cents. Again some use 65% others 70%.
Why are you adding an agent fee? If that is your buyers agent fee. You don’t pay their commission because they are paid out of the proceeds of the sale.
20k assignment fee lol nice. This is stright off of a book i got from Rich Dad education Training Program:
Subtract repairs --$______
Subtract profit for the investor --$______
if ARV is under 80k
if ARV is over $80k
subtract 20% of the ARV
Subtract at least $5k for you --$______
assignment fee(whatever youwant)
Equals the most you would offer = $______
Thanks guys…Vittorio your numbers look good too…you’re rounding down for max profi to you…I chose the higher number to be generous,thats all.But I see what you did and I thank you for your “two cents”
ljcramerproperties …thanks for clarifying that for me …I just assumed that I would be the one to hand over their fee…I’ll be careful to remember that.
Thanks again. :biggrin
Jeremy113…why lol!..is this too ambitiuos ?..wait!!!..I see it now.
What I forgot was the investor fee/profit…so my final figure should be $20K-investor fee?
But that would leave me UNDERWATER…how am I giving investor a profit of ARV when am borrowing roughly $145K to buy the REO?
I wouldnt call it a investors “fee” cause its not really a fee. The reason is because there in the business of buying low to flip and sell for the ARV, also that is why you give them the ARV profit cause thats what buyers get money from. like wholesalers get money from assigning contracts, investors get money from the profit of the ARV thats just what the business is.
If i understand you correctly that is.
Im still kinda new too.
I understand the profit thae all involved have to earn,to make sense…The better question,I guess is to be carefull to consider points charged to me by private lender…Coastal funding charges 2 ponts for loan betwn $125K-1 mill…
So my final number would be :
Asking price @ 199,000
ARV : $ 212,488 …Comps come in @ $201K average
MAO :70% X 212,488 = $148 K
Assignment fee : $20K (10% of ARV)
Private cash fee: $3K (2% of loan + $600 processing fee)
Profit : $17K
Still looks good, because rehabber will bring closing fee for my buyer agent fee @ 10% of ARV as EMD- to be deposited in Escrow.
Whats your take now?..Anyone?
MOA : $150K
PRIVATE CASH FEE: 2 points + $600 proccessing fee.=$3600
okay,let me give you the numbers .
Selling price if $199K
I put it under contract for $ 150-Max Allowed Offer.
Repair will be $8/sq ft x 1920= $15 ish.
ARV = $214K based on area comps($ 199+ $ $ 15)
My discount to ultimate buyer is %25-%40.This particular home is not a REO,just a really nice property in bad shape …I’m working in a reasonable college town area.The REO’S would be @ deeper discount then this.
Your discont o you buyer is $35k.Mine is $49k
So the final numbers would be :
10% x $214k=$21 K -my fee to assign.
- $4 K-Private money fee (2% of MAO)
Howz that ?