Should I Buy; Is the Deal Profitable

[Coral Hernandez]

Is this Deal Profitable? How to Determine:

Step 1:

• o Identify the Deal Strategy
  • Fix & Flip,
• Rental (Buy & Hold)
• BRRR (Buy,Rehab,Rent,Refinance)

Step 2:

• o Determine the ARV (AFTER REPAIR VALUE) – Use Comparables, which are recently sold Houses in that area that are similar in Style/Structure.
  • This can be obtained by an “Appraiser”.

Step 3:

• o Determine your Purchase Price (Highest Dollar Amount you will pay for the deal to make sense)

• o Calculate the Total Cost of Repairs and Closing Cost
  • § “Deal Economic sheets” can be very useful to streamline this process for determining closing cost (title, tax, lawyer, etc.)

• o Add [Purchase Price and Total Cost] together.

Step 4:

• o Minus the Amount from
• o [Step 3 Purchase Price + Total Cost] from
• o [Step 2 Projected ARV Amount]
• o = TOTAL PROFIT

This will calculate the total amount of profit you will make after listing and selling the property. Your “Profitability”