Posted by Jim FL on February 04, 2002 at 22:31:21:
I think the formula you are referring to is perhaps the one Legrand and others espouse.
It goes something like this;
70% x FMV - Repairs - your profit = Max offer.
Although this is a good formula for safely getting a good deal, you may also want to contact some local cash investors and see what their buying criteria is.
Some will want a certain number for their profit, others will only buy at a certain value ratio.
Each has what they are looking for, and when you find that out, it becomes MUCH easier to complete deals.
I once flipped houses pretty regular to a guy who wanted houses with cosmetic only repairs, things like paint and carpet, but would pay up to 85% of value.
He bought these with his credit line, rented them out section 8, and then refied them to free up his credit line. He was an easy customer.
Good luck with your deal,