How do you know how much a buyer can afford?

When trying to figure out a payment for an individual or yourself please remember the 1% rule. This works out great. Basically your payment with principle and interest taxes and insurance (piti) will be 1% of the sales price/purchase price. So if a buyer that is looking to pay 900 per month their maximum purchase price will be $90,000. To make money here, an investor would have to go less (purchase in the $50 - $70,000 range) to make this a positive cash flow opportunity.

I hope that this information helps!

when getting info from potential buyers or rent to own prospects ask them these questions as you write down ALL the info for future reference
1.how much can u afford for a payment per mnth==keep in mind you will have taxes,insurance,maintenance,garbage etc
2.do u have a down payment
3.how many bedrooms do u need,do u want orNEED a garage?
4.what area do u want or NEED
5.1 story or 2 or does it matter?
6.land 1 acre,2 or 1/4 enough?
7.ask them EXACTLY what they want and what they NEED make sure you write all down for future reference.
the main thing is getting the monthly payment they can affor WITH ALL EXPENSES .
as u gather ALL these expenses on each property you evaluate you can MATCH the buyer to what you currently are evaluating.

same goes for keeping ALL info on each and every house you evaluate!! this info stays in your notebook to be MATCHED with buyer be sure to gather ALL expenses i cant stress that enough. you will add to the questions as you get experience so be sure to keep notes as u learn

hope this helps u in some way!!
good luck and TAKE ACTION TODAY!!
jay

Thank you guys your advice has helped alot. I will start looking for houses in that range immediately.