I am not sure what kind of price I can offer someone. I am looking at a house that still has a $79k mortgage. The comps are 90k. The house does not need any work. The seller wants 75k. Is there any room to make any wholesale money on this house.
chris
You need to use the MAO offer which is 70% of the ARV minus repair costs minus your fee.
The percentage though is dependent on market conditions. If the market is not so good in your area you need to reduce the % down.
What ever you don’t base your offer on OLD Comps…
In many markets comps are not comps any more, even comps that are 6 months old.
You need to look at current market competition then take into account any substantial changes in your real estate market.
Then buy below 70% of CURRENT market prices
I hope this helps
I have not used 70% for over a year. Eric an Mr. Investor are right. You have to use accurate comps. Know the neighborhood. Better yet, know your buyers. They will tell you what their price point is.
I’ve found that my offers are generally falling between 25-35% of the ARV (average ARV between $85-150,000). The property owners will some time have a bad reaction, but not nearly as bad as you will get if you can’t close the deal.
The worst thing the homeowner will say is no.
Thanks everyone for the information. Now I have a much better idea of what I have to do.