determine the After Repair Value of the property (ARV). Multiply that by 60%. That is the price to pay for the property if there are no repairs required. If there are repairs required, subtract the cost from the repairs from the purchase price. That total is the price you should pay for a rehab.
This formula will not work in this blazing market place. You are looking for a 40% profit margin in this blazing market place?? Heck, I will take anything with a 15% profit margin. There is no secret formula basically. Just know your market and look at your competition and how much they are offering.
it means this:
determine the After Repair Value of the property (ARV). Multiply that by 60%. That is the price to pay for the property if there are no repairs required. If there are repairs required, subtract the cost from the repairs from the purchase price. That total is the price you should pay for a rehab.
The formual is fun, but the x-factor would be the ARV correct?
How would a lender determine the ARV?
Comps?
This formula will not work in this blazing market place. You are looking for a 40% profit margin in this blazing market place?? Heck, I will take anything with a 15% profit margin. There is no secret formula basically. Just know your market and look at your competition and how much they are offering.