At what % below ARV would a rehabber purchase a property in the state of California? Is this % below ARV the same as wholesaling or is it a different %. Where can I get accurate %?
newbie Jacque1
This is just my two cents so take it for what it’s worth. As a rule even here in CA you still want to be at or below 70% of ARV - minus repairs. As a wholesaler you have to go even further below to factor in your wholesale fee.
That said, depending on the price range you are looking at and the area you are working in it may be not only difficult to find properties at that ratio but may be near impossible. I try to get as close as I can to 70% below market and it may not factor in the repairs (depending on how much cost is involved in repairs). I also know people that will buy at 80%. It all depends on the price range you are working in and the amount of repairs that are needed. Somewhere I heard a rule of thumb that once you go over 350K - 400K you can then go to 80% of ARV. Whether that will actually work for you I can’t say. Hope that helps.
Cheers
Brewer is correct 70% is usually where I have to draw the line. If I can get it for less than 70% ARV then thats just more money in the bank. Some people will do it for less, like 80%, but if you do that, the room for profit is so small that there is a greater chance of not even coming out even after you factor in unexpected repairs, days on market, and ultimately not having any negotiation room. But those people I know doing it for 80% are not in CA where 80% might be at least 50k below ARV.
At least 70% for me!
Also just my 2 cents.