OfflineCan someone help me with this answer?
How do you figure out ARV on a home that needs major repairs when all of the comps in the area have been purchased by investors that also need major repairs so right now they are all way below what one would pay for them after they were all "dazzled" up and move in ready. I have come across several homes like this and I am stumped on what I should pay for them in order to wholesale them to my investors.
thanks
Niki
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I think you'd be safe offering 50-60% of the asking price; that'd leave you some room. I learned somwhere, that traditionally that is why conventional lenders only loan 80% of appraisal or purchase; that way, if they have to repo or something, they can move it quickly at a discount; all that being said, who knows where we'll be when the dust settles.
still looking crosstown' and finding killer deals
crosstown looker
I talked with my HML about this, and they said it is really hard to get accurate comps on major rehabs, especially in this market. comp values are constantly getting skewed by rehab purchases, foreclosure sales, etc.
I would agree that the only think you can really do is come up with a rough estimate of ARV as best you can, subtract every single little thing for the rehab, subtract all your loan and holding costs, subtract a bunch more for unexpected things, subtract your profit, and them make that lowball offer!!
Good luck!
Tracey
Thanks you guys for your advice. I will run some figures and keep my fingers crossed!
Niki