Max Offer Price Calculator

I have attached the simplest max offer price calculator I have seen kicking around. Give it a try and let me know what you think?

Calculating Offer Price
Based on property with: ARV = $200,000, Repairs = $10,000
Scenario#1 - Buyer says they want 30% equity after Rehab expenses for fix and flip.
After Repair Value $200,000
Required Investor Profit = -(30% ARV) -($60,000)
Rehab -($10,000)
Your Profits -($10,000)
Max offer price if not REO or Short Sale $120,000
If REO or Short sale = -(.03 *120,000) for transactional funding and AB closing costs -($3,600)
Wiggle Room -($1,400)
Max offer price if REO of Short Sale $115,000

Scenario#2 - Buyer says they want to make $25,000 after Rehab expenses for fix and flip.
After Repair Value $200,000
Required Investor Profit = $25,000 -($25,000)
6% of ARV for Listing commissions -($12,000)
3% of ARV for Closing Costs -($6,000)
Rehab -($10,000)
Your Profits -($10,000)
Investor balance before holding costs $137,000
Holding costs = .06*$137,000 = -($8,220)
Max offer price if not REO or Short Sale $128,780
If REO or Short sale = -(.03 *128,780) for transactional funding and AB closing costs -($3,863)
Wiggle Room -($1,917)
Max offer price if REO of Short Sale $123,000
Scenario#3 - Buyer says they want 20% NET CAP RATE after Rehab expenses for rental.
Based on Gross rents of $1000/month, Taxes = $100/month, Management = $100/month or 10% of Gross rent, insurance = $50/month per unit.
Gross Rent = $1000/month
Management = -($100/month)
Taxes = -($100/month)
Insurance =-($50/month)
NET INCOME/MONTH = $750/month*12 = $9,000 NOI/YEAR / .2 = $45,000 which is the Max the investor will want to pay after rehab and paying you. Since it is already rented you should be able to get paid $5K if you can get it under contract for $40K.

Cheers,

Dave