Is the Formula still Valid for Making offers on Reos?

ARV X 65%-Repairs-Fee= Max offer to the bank?

It depends on the location, amount of inventory, and the competition.

Is it a cosmetic fixer in a densely populated area? If yes, than no.

Is there lots of amateur competition, and light inventory? If yes, than no.

If it is in a less densely populated area with a relatively significant amount of inventory, not a cosmetic fixer, and light competition, then yes.

Since every schmuck is scouring the MLS for ‘fixer reos’ you need to find the ‘gatekeeper’ agents that control the reo inventories for the banks, and get to be their friends, and prove you’re not a flake, or a wanna-bee, so that they’ll feed you deals before they become public.

In my area 80% of ARV is ‘good enough.’ It’s the local demand that raises or lowers the ARV formula. Slow sales and weak demand, sink the ARV’s, and the opposite is true. Price points make a lot of difference, too. The higher-end deals often have WAY less competition, and the discounts can be much bigger.

Notwithstanding, on the higher price point deals, the actual dollars made are bigger, even if the discount on the ARV didn’t change.

Hope that helps.