What Is A Good Deal?
I am intrested in buying property from For Sale By Owners at a discounted price. how much below market value Should I purchase these homes for if i choose to flip the home.
I am intrested in buying property from For Sale By Owners at a discounted price. how much below market value Should I purchase these homes for if i choose to flip the home.
Uhm, no idea, but I would assume whatever you can get in profit. Since your new to the field probably any amount of profit would be worth the education received by performing the process.
I really don't think you should worry about how much below market you get a home for, more so how much more than market you feel you can sell the home for... Understand?
Ppl are always going to ask for more than what they think they can get. The real question then becomes how much less can you get them to sell and how much more you can you sell it for? Maybe you can talk them down 6% from market, throw in a paint job and landscaping job and sell it for 10% over market... who knows. The thing I know is that ppl always seem to want a place that is in "move in condition", meaning they are too lazy to put any work into the property. If you can afford the 1 month of payments it may take to finish the "chores" you really needn't worry about the amount you pay, more so the amount you can get... See what I mean? Maybe others can help more.
Do you intend to "flip the property to another investor? If so, use the following formula:
ARV (After Repaired Value) X .70 Minus repair costs, Minus your cut = MAO (Maximum Allowable Offer) These numbers generally work for investors.
If you are going to "flip" to a new retail buyer, you should factor in at least 6 months of holding costs to cover insurance, utilities, payments, real estate commissions (If applicable), closing costs etc, as well as a dollar amount you want to make for your time. Don't forget repairs when needed. Once you know all of these costs, subtract them from the retail value, subtract a little more for negotiations, and submit your offers.[ Edited by jeff12002 on Date 01/12/2004 ]