My offer - To a seller

[Richie Martin]

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?

[Jaycee Greene]

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.