# What Costs & Percentages Do You Include in Max Offer Formula?

3 Replies

Down Payment (25%?)

Entrance Costs (lender fees) \$2,000+

Rehab Costs?

Holding Costs (\$3,000)?

Exit Fees (8% or resale price)?

Mortgage Payoff?

@Brandon Sturgill   for me the toughest one to estimate is the rehab cost.

@Brandon Sturgill I highly recommend not using percentages to calculate expenses.  As an example I created my own string in excel for escrow and commissions expenses. This is what my selling cost string looks like.

=89+50+300+100+(A2*.0022)+(A2*.001)+200+((A2*.0125)/2)+(A2*.0024)+(A2*.05)

That string is really only good in SoCal but it can give you an idea of what I mean. You need to talk to an escrow officer in your area and find out how to calculate each expense customarily paid in a deal. Then build a spreadsheet to match. I recommend this because using percentages often leads to underestimating costs on low price homes and over estimating costs on high priced homes. It took me a year to realize why I couldn't get an offer accepted over \$300,000 in my area. It was because I used percentages to calculate costs and my deal was too fat.

You can check out our mobile app at www.rehabcalc.com to get an idea of what the outcome should look like.

Thanks @Stephen McKee