Maximum Offer Worksheet
Selling Price……………………………….....$_______________
(Minus)
Repair Cost…….$__________________
Carrying Cost…..$__________________
Maintenance……$__________________
Closing Cost(Buy)$_________________
Closing Cost (Sell)$_________________
Sales Commission.$_________________
Misc. Expense…..$__________________
Purchase Price…..$__________________
(Equals)
Total Costs……………………………….......$ ___________________
(Minus)
Target Profit……………………………….....$____________________
(Equals)
Maximum Offer………………………………$____________________
__________________
Mike
https://tvallc.isrefer.com/go/RehabLite/renvestr/ Free tools
worksheet...enjoy
Mike
https://tvallc.isrefer.com/go/RehabLite/renvestr/ Free tools
Thanks Mike, it's just what I needed.
If it's to be, it's up to me! Believe in YOURSELF!
Hi Mike,
But I am not sure that I understand the meanings of a couple of things. Perhaps you can explain them to me?
What are the...
Carrying Costs (And)
Maintenance Costs
When it comes to finding and buying a house?
Thanks,
Theo T.
CogniWorld-LV
The problem with not having a goal is
that you spend all of your time running
up and down the field but you never score.
-Bill Copeland
Can you fill in numbers please for some of the newbies. I've had this drilled into my head by Mike but, it took a while. I actually had to make an Excel spreadsheet to figure it all out for me. For instance, the percentage you use for holding cost, commission, closing, etc.
Allen & Denise
Denal Enterprises
Hi Mike,
But I am not sure that I understand the meanings of a couple of things. Perhaps you can explain them to me?
What are the...
Carrying Costs (And)
Maintenance Costs
When it comes to finding and buying a house?
Thanks,
Theo T.
CogniWorld-LV
Theo,
Carrying cost can be: electric,heat, insurance, mortgage payments,advertising,etc
Maintenance cost can be: mowing,snow removal,locks changed,etc
Mike
https://tvallc.isrefer.com/go/RehabLite/renvestr/ Free tools
Quote:
Would you be able to show a real life situation with dollars and sence? Thanks
Jbird61
From nstreet:
A short sale I worked on:
$115,000 - value of the property
- $17,000 - profit (I wanted a little more than 10% for my time)
- $28,000 - Fix up costs (this included lifting the corner of the foundation)
- $6,900 - Holding costs (115,000 x .012(1.2%) x 5 months - this included time to fix the property)
- $3,450 - Closing costs ($115,000 x .03(3%))
- $6,900 - Realtor fee ($115,000 x .06(6%))
---------------------------------------
= $52,750 - The most I would offer (actually, I offered about $50,000 because I wanted room to negotiate if I needed.)
Mike
https://tvallc.isrefer.com/go/RehabLite/renvestr/ Free tools
Thanks, Mike, for sharing your worksheet -- very helpful.
Appreciate you sharing something all of us could(should) be using.
John
Quitters NEVER win - Winners NEVER quit!
"P.U.S.H. = Persevere Until Something Happens" Dean
“Opportunity is missed by most people because it is dressed in overalls and looks like work.” Thomas A. Edison
Check out my Road to Redemption journal: http://www.deangraziosi.com/real-estate-forums/investing-journals/88171/...
www.windfall-properties.com
Thank you very much for the excellent worksheet and most of all the explanation and example for those of us just starting out!! Very impressive.
Jeannie
You can also go by factor. You just need to know what percent buyers are paying in your area.
For Mike's area, it's looking like he used a 70% factor minus repairs.
ARV 115k x.70%= 80,500 minus 28k repairs = MAO of 52,500.
This is A simple way to factor in all your costs but you need to know what your markets factor is.
70% in San Diego is a home run. Most investors here, are paying 75%...
Jason S.
San Diego, CA.
**All CASH House Buyer!**
Refer Us To Neighbors, Friends & Family, Earn $1,000
LIKE my FB page http://www.facebook.com/JandBHouseSolutions
Thank for this example, Mike. I like this formula, but if you use the 70% of ARV, minus repairs & your profit, the numbers don't come out the same. Would these numbers be enough to present to the potential buyer, or, we need better numbers? What if it's a rental property?
Would you be able to show a real life situation with dollars and sence? Thanks
Jbird61
From nstreet:
A short sale I worked on:
$115,000 - value of the property
- $17,000 - profit (I wanted a little more than 10% for my time)
- $28,000 - Fix up costs (this included lifting the corner of the foundation)
- $6,900 - Holding costs (115,000 x .012(1.2%) x 5 months - this included time to fix the property)
- $3,450 - Closing costs ($115,000 x .03(3%))
- $6,900 - Realtor fee ($115,000 x .06(6%))
---------------------------------------
= $52,750 - The most I would offer (actually, I offered about $50,000 because I wanted room to negotiate if I needed.)
I think that the difference is that Mike's formula above is for if you intend on flipping properties yourself with cash. Compared to the below formula for wholesaling:
115,000 * 0.7 = 81,900
81,900 - 17,000 - 28,000 = 36,900 MAX WHOLESALE OFFER (with Mikes numbers)
Now note that 17,000 is somewhat greedy for wholesaling a deal like this but perfectly reasonable if you have the cash to buy and flip (not wholesale), a more realistic wholesale fee would be 5,000 for this property. So that would change the maximum wholesaling offer to 48,900 if my math is correct. But if you can make 17,000 GO FOR IT! Unless you are more interested in building a good reputation by handing off killer deals instead of getting greedy, it's really up to you.
When you wholesale you don't pay holding costs, closing costs, or Realtor fees. The buyer pays holding and closing costs, and the seller pays Realtor fees and closing costs, you are the middle man in wholesaling. Correct me if I'm wrong Mike, that was just my understanding of it all.
Writing this actually brought up a question I have for anyone that knows, when you do double closing, do you pay twice as many closing fees as a buyer/seller and should that be considered when making your max offer?
Thanks
Dominic
Are you new? Check out my NEW and IMPROVED Guide for Beginners! http://deangraziosi.com/real-estate-forums/everything-else/128413/domini...
115,000 * 0.7 = 81,900
81,900 - 17,000 - 28,000 = 36,900 MAX WHOLESALE OFFER (with Mikes numbers)
Now note that 17,000 is somewhat greedy for wholesaling a deal like this but perfectly reasonable if you have the cash to buy and flip (not wholesale), a more realistic wholesale fee would be 5,000 for this property. So that would change the maximum wholesaling offer to 48,900 if my math is correct. But if you can make 17,000 GO FOR IT! Unless you are more interested in building a good reputation by handing off killer deals instead of getting greedy, it's really up to you.
When you wholesale you don't pay holding costs, closing costs, or Realtor fees. The buyer pays holding and closing costs, and the seller pays Realtor fees and closing costs, you are the middle man in wholesaling. Correct me if I'm wrong Mike, that was just my understanding of it all.
Writing this actually brought up a question I have for anyone that knows, when you do double closing, do you pay twice as many closing fees as a buyer/seller and should that be considered when making your max offer?
Thanks
This Example was taken off of "nstreet"(coach) that he showed in the "offer formula" that you all can find by typing "offer formula" in the search box (upper left) and hit enter.
Mike
https://tvallc.isrefer.com/go/RehabLite/renvestr/ Free tools
wrote 'how do I present this to my buyer?'
refer to my post
http://www.deangraziosi.com/real-estate-forums/my-deals/81893/deal-you
this presentation lacks the ROI which you can figure in if needed.
As dominic mentioned, this is a flip deal, if you wanted to wholesale or sell to a buy/hold buyer you would have to change the numbers. Refer to the post "offer formula" you can find in search box.
This was nstreet(official coach)reply to offer formula that I used here as an example
Mike
https://tvallc.isrefer.com/go/RehabLite/renvestr/ Free tools
Thank you, Mike!
refer to my post
http://www.deangraziosi.com/real-estate-forums/my-deals/81893/deal-you
this presentation lacks the ROI which you can figure in if needed.
As dominic mentioned, this is a flip deal, if you wanted to wholesale or sell to a buy/hold buyer you would have to change the numbers. Refer to the post "offer formula" you can find in search box.
This was nstreet(official coach)reply to offer formula that I used here as an example
hi everybody
Here is a copy of the spreadsheet that I use for my rehabs with some real numbers of rehab that I am purchasing right. As you can see you just input three. Important numbers purchase price, sell price and fix a price, you get a pretty good idea if there's a profit or not (green equals profit, yellow equals caution and red equals losing money) and below gives you a breakdown what the holding costs will be per month based on the number of months you will hold onto it for.if anybody has any questions or any way of improving this spreadsheet. Please p.m. me
thanks, Reuben
sorry everybody. How do you in an attachment to the post. I'm trying to share my Excel spreadsheet with everybody?
Thanks, Reuben
I think you can only attach files when you start a new thread. I don't see a way to attach one in a reply![Sad Sad](http://mail.deangraziosi.com/modules/smileys/packs/example/sad.png)
Dominic
Are you new? Check out my NEW and IMPROVED Guide for Beginners! http://deangraziosi.com/real-estate-forums/everything-else/128413/domini...
Just found this after looking at the seller info form, thanks!
.
I got to keep organized with stuff like this or I'll go crazy
Thanks for helping the rest of us!
RENinja
"Remember, success is a journey, not a destination.
Have faith in your ability."
Bruce Lee
What are your buyers wants?
Do they want 30% ROI?
Find deals to fit your buyers wants.
Use the tool below to run the numbers for max offers and ROI's for your buyers. It calculates the expenses, repairs and more.
Mike
https://tvallc.isrefer.com/go/RehabLite/renvestr/ Free tools
Mike
https://tvallc.isrefer.com/go/RehabLite/renvestr/ Free tools
.