newby needing advise

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newby needing advise

Walter Sauls
Richmond, VA · Member since 2014 · 5 posts · 0 votes

I am a new investor and licensed contractor. I have been making offers on REO properties to flip for 3 months. Offen I never hear back from the sellers agent as to whether the bank accepted my offer or not. I must be doing something wrong. Here is how I determine the offer price. I take the ARV established using my realtor's CMA of the property and also I do my own CMA and compare the 2 then I divide the ARV by .65 and subtract repair cost and holding costs to establish the offer price. Please tell me what I am doing wrong.

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  • Curt DavisBusiness Member
    Flipper/Rehabber · Memphis, TN · Member since 2008 · 5k+ posts · 2k+ votes
    11y

    Your not doing anything wrong, the banks are not going to give you a home at around 50% of ARV. I dont know what the home prices are in your area but if you say took a home with ARV of $200,000 x .65 = $130,000. Assuming renovation on average of $15,000 and holding, closing, taxes and insurance are another $5,000. You then say you need to offer $110,000.

    This is why you are not getting any response.  They are selling the home to other buyers who are paying more for the home.  You should also be using a Realtor to make your offers through.

    You should be offering around $145k for this example and that still does not mean you will get it.

    God luck.

    Curt Davis - KAIZEN Realty538 Reviews
    WebsiteView Page
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  • Jon HuberPro Member
    Rental Property Investor · Boca Raton, FL · Member since 2014 · 1k+ posts · 713 votes
    11y

    @Walter Sauls  Also, know that these can take up to a year. I literally just heard back on a property I put an offer on in the beginning of July. It's already December. It's a tedious process, and certainly not one for instant gratification. Good luck.

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  • Walter Sauls
    OP
    Richmond, VA · Member since 2014 · 5 posts · 0 votes
    11y

    Thanks for the reply. Am i doing the math correctly? Can you suggest other avenues to find properties?

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  • Walter Sauls
    OP
    Richmond, VA · Member since 2014 · 5 posts · 0 votes
    11y

    Thanks Curt,

    I have been making my offers through a realtor.

    I appreciate  any advise you  are willing to  share, where do I need to be  looking to buy  properties? 

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