Am I being to conservative? 70% rule
Hi Everyone!
Complete newbie here working on closing my first deal. I'm looking to fix and flip. As I've been evaluating deals I'm trying to follow the 70% rule. My question is how strictly I should be doing this in the DFW market. Specifically in the areas I am farming the average DOM is 10 days or less. As I'm analyzing deals from whole sellers even using their ARV which I do not really trust it's not possible using the 70% rule so my main question is should I be less conservative considering the market I'm in?
To use just one of the properties I’m looking at as an example it’s AVR is around $165k and $25k in repairs putting my max offer around $90,500. Now if I just work off my desired profit of $20k and factor all cost in I can go up to $95k which is what I’ve offered after my low ball initial offer was rejected. I’m finding out seller wants $110k which just doesn’t leave enough meat on it from my perspective as a newbie investor. That’s fine if the numbers don’t work they don’t work but I’m wondering if a more experienced investor would go for this and settle for a lower profit.