Cash Offers. - Posted by Len

Posted by Brandi_TX on January 31, 2001 at 02:22:23:

Keep in mind that all these “guru’s” tips and techniques are guidelines for you to go by - not LAW.

I would guess that when you actually make or lose money by using someone else’s formulas, you will be able to determine for yourself if they are “outdated”. Just my opinion.


Cash Offers. - Posted by Len

Posted by Len on January 31, 2001 at 24:37:35:

I’ve been hearing that Ron LeGrands “MAO FORMULA” is outdated.

This is the only way I know to make all cash offers on wholesale property to owners and to banks for some of the REO properties.

Is this true? … If yes, then how do we determine what to offer now in the new century?

I know one thing, and that is that any hard money lender is going to be hard pressed to lend anybody more than the 65-70% LTV on any given property! Especially wholesale property that needs fixing up!!!

That’s why I find it hard to believe Rons’ formula is outdated.

Thank You


Re: Cash Offers. - Posted by will

Posted by will on January 31, 2001 at 08:32:42:

if you’re in a hot market use MAO+1K to get the deal.

Re: Cash Offers. - Posted by HR

Posted by HR on January 31, 2001 at 08:11:23:

I don’t think Ron’s MAO formula is outdated. It’s a timeless way to crunch numbers that makes good business sense.

There used to be a profitable pro who used to post at creonline who shared with me one time that he didn’t even use formulas. His formula was: just how low do I think I can steal it?

It was hard for me to comprehend when I started out. But you need some basis to determine value, right? Well, yes. If one works in homes in a certain price range, and one has a good feel about what the repair costs may be for the rehab, then it’s not hard to “know” what that property will be worth fixed up and to fix it up. At this point, you know what price you can’t go over. At that point, you really don’t need a formula. You then start thinking, How cheap can I get this?

He was right.

I don’t use the MAO formula much anymore.

Good luck,


Re: Cash Offers. - Posted by Sherry W

Posted by Sherry W on January 31, 2001 at 06:23:12:

I agree with Jim. I use LeGrand’s formula. It works great. The MAO formula is for wholesale properties only.

Keep on using it and you will get some great deals.

Good Luck,
Sherry W

Re: Cash Offers. - Posted by Jim Ca

Posted by Jim Ca on January 31, 2001 at 05:18:09:

Where you’ve heard these statements are from those who have never done rehab, I’ll bet!

Ron’s MAO does hold true. It is true there are rehabers that Will settle for a 10% - 15% profit margin, but they are usually the hungry ones that (for whatever reason) can not find a deal. And as you said, hard money lenders will not go over 70% LTV (after repairs). They KNOW the game and set the limits what can realisticly be paid for junkers.

Where the MAO will NOT hold true is in the “Pretty” houses or houses needing just little cosmetic repairs. That’s what they’re confused with, I bet.