Comments on: Evaluating This Deal The Wrong Way Could Cost You $16,000… http://www.biggerpockets.com/renewsblog/2009/07/22/evaluating-deal-wrong-cost-21000/ Learn, Network, Invest Sat, 11 Feb 2012 20:37:50 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Stevehttp://www.biggerpockets.com/renewsblog/2009/07/22/evaluating-deal-wrong-cost-21000/#comment-67371 Steve Tue, 04 Aug 2009 09:22:43 +0000 http://www.biggerpockets.com/renewsblog/?p=5995#comment-67371 Stephen, your numbers make sense to me. Although, I would probably factor in some cost of money. As your 30,000 profit requires a ~150k investment. How is it helpful to put a percentage as a guideline but not provide some backup? .-= Steve´s last blog ..<a href="http://buildbankroll.com/2009/08/what-sets-the-experienced-investors-apart/" rel="nofollow">What sets the experienced investors apart?</a> =-. Stephen, your numbers make sense to me. Although, I would probably factor in some cost of money. As your 30,000 profit requires a ~150k investment. How is it helpful to put a percentage as a guideline but not provide some backup?
.-= Steve´s last blog ..What sets the experienced investors apart? =-.

]]> By: Stephen McKeehttp://www.biggerpockets.com/renewsblog/2009/07/22/evaluating-deal-wrong-cost-21000/#comment-67116 Stephen McKee Fri, 24 Jul 2009 04:28:59 +0000 http://www.biggerpockets.com/renewsblog/?p=5995#comment-67116 This numbers seem a little off to me.I am assuming you are getting a $195,000 net purchase. (no closing cost paid by the seller) Here's how I see it. Net sales price = $195,000 Cost to sell 8% = $15,600 Holding costs = $0 (cash) Rehab = $15,000 Minimum profit = $30,000 Closing cost on purchase 2% = $2,700 Max offer = $131,700Are you looking for a larger profit. I'd buy it for $131,700 all day long. This numbers seem a little off to me.I am assuming you are getting a $195,000 net purchase. (no closing cost paid by the seller)
Here’s how I see it.
Net sales price = $195,000
Cost to sell 8% = $15,600
Holding costs = $0 (cash)
Rehab = $15,000
Minimum profit = $30,000
Closing cost on purchase 2% = $2,700
Max offer = $131,700

Are you looking for a larger profit. I’d buy it for $131,700 all day long.

]]> By: Lee Loanhttp://www.biggerpockets.com/renewsblog/2009/07/22/evaluating-deal-wrong-cost-21000/#comment-67107 Lee Loan Thu, 23 Jul 2009 22:53:48 +0000 http://www.biggerpockets.com/renewsblog/?p=5995#comment-67107 Hey, thanks for this article, its very enlightening. We are considering a property and would never have worked out your 65 cents to $1 figure, or minusing the repairs off, great tips! Hey, thanks for this article, its very enlightening.
We are considering a property and would never have worked out your 65 cents to $1 figure, or minusing the repairs off, great tips!

]]> By: Joshua Dorkinhttp://www.biggerpockets.com/renewsblog/2009/07/22/evaluating-deal-wrong-cost-21000/#comment-67072 Joshua Dorkin Wed, 22 Jul 2009 20:27:25 +0000 http://www.biggerpockets.com/renewsblog/?p=5995#comment-67072 BTW - Ironic mistake for us to make, Jason, considering the title of the article. BTW – Ironic mistake for us to make, Jason, considering the title of the article.

]]> By: Joshua Dorkinhttp://www.biggerpockets.com/renewsblog/2009/07/22/evaluating-deal-wrong-cost-21000/#comment-67071 Joshua Dorkin Wed, 22 Jul 2009 20:26:00 +0000 http://www.biggerpockets.com/renewsblog/?p=5995#comment-67071 I've gone ahead and corrected the title to show $16,000. I must have missed it myself when I reviewed it late last night.Thanks Rich! I’ve gone ahead and corrected the title to show $16,000. I must have missed it myself when I reviewed it late last night.

Thanks Rich!

]]> By: Jasonhttp://www.biggerpockets.com/renewsblog/2009/07/22/evaluating-deal-wrong-cost-21000/#comment-67066 Jason Wed, 22 Jul 2009 19:09:08 +0000 http://www.biggerpockets.com/renewsblog/?p=5995#comment-67066 Rich, you are correct. When I wrote this I was working on several deals, and must have somehow pulled the "$21,000" from somewhere else... so yes, you are correct the savings is about $16,000. Rich, you are correct. When I wrote this I was working on several deals, and must have somehow pulled the “$21,000″ from somewhere else… so yes, you are correct the savings is about $16,000.

]]> By: Build Bankrollhttp://www.biggerpockets.com/renewsblog/2009/07/22/evaluating-deal-wrong-cost-21000/#comment-67056 Build Bankroll Wed, 22 Jul 2009 16:58:24 +0000 http://www.biggerpockets.com/renewsblog/?p=5995#comment-67056 I really don't understand this post either... the 65% is a great rule for a starting point. But running the data we use based on actual numbers and a hard money loan (3% points, 12% interest, 5 mos hold-time) we would make about 25,000 flipping it. I have some padding for misc expenses, we do list our own properties for sale (so usually end up paying only 2.5% of commission).Can you explain your numbers... .-= Build Bankroll´s last blog ..<a href="http://buildbankroll.com/2009/07/house-13-megans-law/" rel="nofollow">House #13 – Megan’s Law</a> =-. I really don’t understand this post either… the 65% is a great rule for a starting point. But running the data we use based on actual numbers and a hard money loan (3% points, 12% interest, 5 mos hold-time) we would make about 25,000 flipping it. I have some padding for misc expenses, we do list our own properties for sale (so usually end up paying only 2.5% of commission).

Can you explain your numbers…
.-= Build Bankroll´s last blog ..House #13 – Megan’s Law =-.

]]> By: Richard Warrenhttp://www.biggerpockets.com/renewsblog/2009/07/22/evaluating-deal-wrong-cost-21000/#comment-67055 Richard Warren Wed, 22 Jul 2009 15:30:17 +0000 http://www.biggerpockets.com/renewsblog/?p=5995#comment-67055 Jason,The headline mentions paying $21,000 too much for this deal. However, your math in the article indicates that it is overpriced by $16,250. Am I missing something? Jason,

The headline mentions paying $21,000 too much for this deal. However, your math in the article indicates that it is overpriced by $16,250. Am I missing something?

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