OfflineAs a newbie I really don't know just what this means in terms of figuring out the numbers I need to crunch.
One of my buyers said that he will take any property as long as he can get 30 cents on a dollar after rehab value (ARV). Please tell me how I crunch the numbers with only that information. Also please provide a detailed example of how FMV is determined so I can know if the property will fit the end buyer.
Thanks.
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Verna (newage8767)
First you will have to find out what repairs are needed and what will the home be worth if you do those repairs. That will be how you get your ARV.
But for simple math lets say that you found a that was in great shape and in need of no repairs. It had a Fair Market Value of $100,000. Your buyer wants to buy this home for 30 cents on the dollar (remember it needs no repairs)That would make your offer for this home $30,000.
100,000 x 0.3 = 30,000
I hope that this information helps!
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Okay. Now it is hard to beleive that you can get someone to sell you their home for only 30K if the FMV is 100K! That just seems a little unreasonable to me. Does that work in the real world?
Thanks.
Always striving to move forward toward better times!
Verna (newage8767)
Yes. A lots of inventories here in Baltimore, but the problem is the competition. Try to arm yourself with the knowlege you read on Dean's Book and you will be one mile ahead of your competition. Deans strategy is different compared to tradional REI.
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