bsh 12% 15752
profit 2000
MAO 13752 Starting Offer 125000
I have heard of some wholesalers using a 70% x ARV…and some others using 65% xARV
that can be a great reduction or gain which ever way you look at it…any responses most welcome…thanks guys…and girls
70% is the MAXIMUM that an investor would pay in a good market. We are in different times today. Unless you are determining the ARV by the realities of today as if you needed to sell the house within one month.
Most investors I know won’t touch a property without at least 20K in profit and considering 6-9 months holding costs as a worst case scenario.
When you make an offer you should try your best to figure in what you think needs to be done to the house in order for it to be resold. Most rehab investors will not be interested in the deal if there is no room in the deal to finance the rehab costs with the purchase. Depending on the condition of the property you may want to try and be around 50% of the ARV. Remember the better deals you get the faster you will be able to move them. If they are all borderline it will be hard to assign them.
At the very least you should be able to cover the purchase and the rehab costs in the 70%. Even that is close and may be to close for most rehabbers to be interested.
Its according to how accurate your ARV is to me.I want to be able to sell @ 80-85% of comps average to hopefully sell quick instead of just add another same priced house to the market.To me these formulas are everchanging as the market is, so its hard to stick to one in this down market.