Posted by MM on May 07, 2006 at 03:16:23:
Andy,
65% of after repaired value, including repairs, is usually the top dollar for a lot of people who rehab, particularly those using hard money lender, because 65% of arv is usually (not always) the max they’ll lend. Just glancing at the numbers you gave, it looks as though your doing a good job with your offers. keep up the good work, and never ever over pay :0)
What do you pay for Rehabs - Posted by Andy
Posted by Andy on May 06, 2006 at 21:02:27:
I am wondering what the most you will pay for a rehab is, based on market value. I recently put in an offer on a nice home in an excellent area. The house was listed at 24,900, a foreclosure, and had a after repair value of 60,000-65,000. It would have taken approximately 10,000 to repair. I offered 25K cash with a 1 week closing but a different offer was accepted. Obviously others knew the value in the property and offered more money. Is there a formula you use to determine your highest price you will pay. Thanks for your responses
Re: What do you pay for Rehabs - Posted by Sean
Posted by Sean on May 09, 2006 at 16:11:56:
My honest oppinion, if its only worth 60-65k and needs 10k… 25k is too much to offer…
My absolute max would have been 15-20k.
If I didn’t get it? No biggie move on to the next offer… I’d rather miss 1000 deals, than pay too much for one. In a sub 100K house, I’d definately be shooting for .50 on the dollar, and the more repair I have to do, the bigger payday I expect.
I see folks routinely pay too much, overimprove and within 12-24 months that same house is back on the foreclosure roles… only now its fixed up.
Re: What do you pay for Rehabs - Posted by Pat
Posted by Pat on May 07, 2006 at 18:49:14:
I usually start with the market price after fix-up. Then I work backward figuring my costs and how much I want to make. This gives me my maximum price I’ll pay. Then I make a lower offer (not low enough to insult them), and we begin negotiating. So far this year, I’ve bought 2; 1 for $84,900, the other for $21,900. The first appraised out at $180,000 (sold for $168,000). The other just appraised out for $150,000 and is under contract at this time for that amount with the closing due in 2 weeks.The key is in knowing your market and your costs.
Re: What do you pay for Rehabs - Posted by dutch
Posted by dutch on May 07, 2006 at 10:01:40:
If I can gross 20K on a low end house, I’ll take it all day long. 10k is a fairly light rehab, and maybe a high estimate. Also, someone may have wanted it for a rental or Sec8. then their rehab might only cost them 5K.
don’t worry about the ones that got away. “Yes, No, NEXT” is my motto.
Dutch
OKHomesavers
not necessarily… - Posted by lukeNC
Posted by lukeNC on May 07, 2006 at 06:24:17:
There are a lot of people buying up properties that have no idea what they are doing…I’d find out who bought that property and get a deal to them.
you need to find the deals that are not advertised to everyone, tie those deals up and sell them to these guys.