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Updated 22 days ago on . Most recent reply

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Richie Martin
  • Investor
  • Newport News VA Hampton VA Norfolk VA Portsmouth VA, Suffolk VA
5
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22
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My offer - To a seller

Richie Martin
  • Investor
  • Newport News VA Hampton VA Norfolk VA Portsmouth VA, Suffolk VA
Posted

Im a little confused on what my offer price should be after I get my ARV (Purch + Renov + Holding Cost) then X 70% = MAO

Shouldmy MAO be what I offer for the property to buy the property?

  • Richie Martin
  • Most Popular Reply

    User Stats

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    Jaycee Greene
    #1 BRRRR - Buy, Rehab, Rent, Refinance, Repeat Contributor
    • Real Estate Consultant
    • St. Louis MSA
    480
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    1,882
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    Jaycee Greene
    #1 BRRRR - Buy, Rehab, Rent, Refinance, Repeat Contributor
    • Real Estate Consultant
    • St. Louis MSA
    Replied

    Hey @Richie Martin, welcome to the BP Forum! Nope, take the ARV and times it by 70% and THEN subtract the rehab costs. So, for a $200k ARV that needs $25k in rehab, it would be 200*0.7=140-25. So, $115k.

    For the algebra nerds, it's: MAO = (0.70 * ARV) - Rehab. FYI, the holding costs are built into the 70% discount factor.

  • Jaycee Greene
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