What will you pay for rehabs? - Posted by Jasonrei

Real Estate Investing
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Posted by Brent_IL on July 31, 2003 at 14:34:18:

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What will you pay for rehabs? - Posted by Jasonrei

Posted by Jasonrei on July 30, 2003 at 11:17:18:

I use the following:

Expected Sales Price

  • Repairs
  • 6 mos. holding costs (purchase & repair interest- I plug in 18% per annum, taxes, insurance, lawn maintenance)
  • Sales Costs (advertising, agent commission, closing costs)
  • Desired Profit ($10k on cheap easy deals, up to $20k on more involved projects, way more on multi-family)
    = Maximum Purchase Price (including closing costs)

Any rehabbers have similar guidelines? Seems to me that a general rule is that I have to buy at about half of retail, if I’m paying all cash. Quickly glancing at the deals I’ve done, 50% seems about right.

Doesn’t Steve Cook use “70% of retail, less repairs”?