OfflineI put a house under a 90-day option contract for 35k and hope to resell the rights of the contract for 8k. The only catch is that the house needs a solid 35k in work, but comps out to be worth 120k.
Assuming my numbers are accurate, would this be a deal an investor would jump on and pay cash for?
The house is located on the north side of 126 martin street in Covington Kentucky in a transitioning area near Scott street.
Thoughts?
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numbers look good to me!! 120 arv - 40%= 72000-repairs at 35000=37000
Depends on the investor looks like maybe a 2000 contract depends on the area and your investor. Thats Great 90 Day option gives you pleanty of time to do some marketing.
Good Luck
Jay C
Jay C
Now it's ARV * .60 - repairs? when did this happen? I can understand doing 65% to ensure my cut as a wholesaler, but 60%? Damn investors are greedy...
This is the formula that I use when wholesale flipping.
I buy at 65% of true ARV, AFTER repairs!
Using your numbers:
ARV $120,000 determined by sold and selling comps, average DOM.
Repair estimate provide by 3 licensed contractors $35,000
So $120,000 at 65% = $78,000 minus repairs =$43,000 Max offer price.
Your buy price is good PROVIDING your estimate and ARV numbers are right!
Now flip it to your investor for 70% of ARV $84,000 minus repairs he buys at $49,000.
At your buy price that's a $14,000 gross profit!
Now what you investor actually pays is $84,000 buy price plus repairs = He purchased at 70% of ARV.
So many wholesalers advertise their ARV numbers without including repair costs for their buyer. I see it all the time.
Hope this helps and congratulations on your acquisition!!
Michael Mangham
MD Home Acquisitions LLC
http://www.mdhomeacquisitions.com Seller site
http://www.mdhomea.com Seller site
http://mdhacq.com Seller site
http://www.mdhomeacquisitionsbargainhouses.com Buyer site
http://www.mdhomeacquisitionshousehunter.com Bird dog, Door knocker site
http://www.mdtfcam.com Transactional funding site
Knowledge is power, but execution trumps knowledge. Tony Robbins
http://www.mdhomeacquisitions.com Seller site
http://www.mdhomeacquisitionsbargainhouses.com Buyer site
http://www.mdhomeacquisitionshousehunter.com Bird Dog Site
http://www.mdlodeals.com Tenant/Buyer site
I always enjoy reading the posts that show initiative from those who don't have cash to fall back on.
The key word here is "finally."
This real estate process doesn't bring overnight riches but it will work. It's been 30 days since we bought the DG books and started working this part time. We have made a serious offer on two homes (FSBO) and will offer on another in a day or two.
We have also become active in an REI club and will be meeting with another group of investors next week. No finalized deal yet but we've made a lot of progress.
Alice and Jim
HomeStar2020
Michael,
More great info from you.
Thanks,
Tom