OfflineI got under control property in Anaheim in Ca
the price is 235 K it need about 30k in repair
ARV is 345,000.00
3 bed
1 bath
1426 SF
7234 SF lot
the rent in that area is about 2200.00
I have a video of the house
it need to be turn around quickly
Privet message me so i can give you my phone and video of the property
tom
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I suspect you'll probably face some challenges trying to turn this deal quickly, because you essentially are asking someone to spend $331.8K (including holding/acquisition costs and an assignment fee of $10K).
IMHO, this deal would be much better if purchased for no more than $160.8K.
235K include my assigning fee so the numbers will look like that
235,000.00
35,000.00 repair
16,560 holding costs 4 months x 1.2% ARV =4 x 4140
20,700 6% agents commission
10,000 closings cost ??? I'm not sure about that
so total:
317,260.
it will give you a profit 345,000.00 - 317,260.00 =27,740
27,740.00
Let me know how you get your numbers so i may learn something
tom
At your current numbers, the margin (8.04% [$27,740/$345K = .0804]) isn't large enough to cover the disposition costs (typically around 10%) if your end-buyer intends to flip this property. Otherwise, s/he would lose money on this deal at those numbers.
your max offer price = ((.7*$345K)/(1.06+.25*70/365)-$30K)/1.1-$10K = $160.8K
your end-buyer's purchase price = $170.8K
my additional assumptions:
30% margin to lock in min profit
rehab will take at most 30 days
ADOM is 40 days
acquisition with hard money (15% + 6 points)
taxes, insurance, and other holding costs (10%)
slack and acquisition costs on A-B leg of transaction (10%)
assignment fee $10K
Welcome to southern California...77% of ARV minus repairs is a good deal out here. I know 2 rehabbers who are in at 83% and 89% of ARV. I don't know how the guy at 89% is going to make any money. I was talking to the hard money lender on the deal who loaned at 60% of ARV and he would be happy to take it back and hold it as a rental.
I'm familiar with SoCA (especially OC). I might go as low as a 20% margin for the right deal in SoCA, but that depends on the deal.
The one who's in at 89% of ARV could do OK if he intends to hold that property, or if he intends to flip it as a FSBO. However, that margin is still too thin for me. I wouldn't do less than a 20% margin--even in a hot market--for rehab/flips.
Yet, I'd be willing to buy a property at 100% of the ARV in some cases--provided I could get it with nearly 100% seller financing (with reasonable terms).