Posted by David MacGown on June 03, 1999 at 13:38:47:
Hi Judy,
Any house with an after repaired value of over $100,000 will net you a profit of 15%. You can find out the arv by a market sales analysis. Do not even think of purchasing a home until you know what you can sell it for. an excellent book is Buy it,fix it,sellit! David
Rehabbers! What are your buying guidelines - Posted by Leon (NC)
Posted by Leon (NC) on June 01, 1999 at 24:46:28:
I’ve been out driving looking for ugly houses and have come across quite a few. One is listed with a realtor. The house is in a pretty good area and would probably be worth 65k ARV with repairs running at least 17.5k. This house is ooold and ugly. Looks to be 900 to 1000 sqft probably 2/1.
If my numbers are correct, hypothetically would you be interested in this house at a price of 20k (this includes my flip fee)? Would this much in repairs be too much for you at ARV of 65K. In order to help me determine where I should be going with my offers, I could really use some help knowing what your buying guidelines are. Repairs to value, only 3bdrm, etc. Where do you draw the line.
I’m currently running ads in my area for buyers and I have questionares ready to send for my files but I would sure like some of your expert input. You guys and gals are invaluable. Thanks.
Leon
Re: Rehabbers! What are your buying guidelines - Posted by BR2
Posted by BR2 on June 01, 1999 at 18:49:25:
Pretty much as Bert stated below. Just picked up my 3rd.
Good luck!
Re: Rehabbers! What are your buying guidelines - Posted by RickCA
Posted by RickCA on June 01, 1999 at 10:40:02:
Ok Leon here is how LeGrand would do it,
2)Subtract the repair costs
3)Subtract the purchase costs (closing,escrow title ect.)
Subtract holding costs (6 months)
Subtract the Sales costs (Relator fees)
Subtract your minimum acceptable profit
Subtract a Hedge factor (approx. 3-5%)
This is your MAX offer. You should start lower.
You can always go up but NEVER down
Good Luck
Re: Rehabbers! What are your buying guidelines - Posted by RickCA
Posted by RickCA on June 01, 1999 at 10:40:02:
Ok Leon here is how LeGrand would do it,
2)Subtract the repair costs
3)Subtract the purchase costs (closing,escrow title ect.)
Subtract holding costs (6 months)
Subtract the Sales costs (Relator fees)
Subtract your minimum acceptable profit
Subtract a Hedge factor (approx. 3-5%)
This is your MAX offer. You should start lower.
You can always go up but NEVER down
Good Luck
Re: Rehabbers! What are your buying guidelines - Posted by Bert G
Posted by Bert G on June 01, 1999 at 10:25:26:
Does R.LeGrand’s formula apply here? ARV times 70% minus repairs = MAO (Maximum Allowable Offer), and you never pay MAO. Have you flippers and rehabbers found this to be useful in the real world?
BG
Re: Rehabbers! What are your buying guidelines - Posted by Bert G
Posted by Bert G on June 01, 1999 at 10:25:26:
Does R.LeGrand’s formula apply here? ARV times 70% minus repairs = MAO (Maximum Allowable Offer), and you never pay MAO. Have you flippers and rehabbers found this to be useful in the real world?
BG
Re: Rehabbers! What are your buying guidelines - Posted by ChrisG
Posted by ChrisG on June 01, 1999 at 09:30:23:
Leon,
I’m no pro but I’ll try to answer your question.
Wholesaling this property for $20K seems to fit the bill if your numbers a right. Most rehabbers want a minimum profit of $10K or more on lower priced homes and at least 15%-20% on the higher priced homes. Most of the time it’s not worth the trouble rehabbing if you can’t make these minimums.
Regards,
Chris
Re: Rehabbers! What are your buying guidelines - Posted by ChrisG
Posted by ChrisG on June 01, 1999 at 09:30:23:
Leon,
I’m no pro but I’ll try to answer your question.
Wholesaling this property for $20K seems to fit the bill if your numbers a right. Most rehabbers want a minimum profit of $10K or more on lower priced homes and at least 15%-20% on the higher priced homes. Most of the time it’s not worth the trouble rehabbing if you can’t make these minimums.
Regards,
Chris
Re: Rehabbers! What are your buying guidelines - Posted by Judy
Posted by Judy on June 02, 1999 at 11:08:07:
Chris,
When you say “Most rehabbers want a minimum profit of $10K or more on lower priced homes and at least 15%-20% on the higher priced homes.” 15%-20% of what?
Thanks, Judy
Re: Rehabbers! What are your buying guidelines - Posted by ChrisG
Posted by ChrisG on June 03, 1999 at 14:14:04:
Sorry for the the late reply.
15%-20% of ARV or After Repair Value.
-Chris