Realistic Maximum Allowable Offer for Los Angeles BRRRR deals
General question regarding running numbers for viable BRRRR opportunities in LA.
We are all told that the max allowable offer should not exceed 70% of the ARV less the construction costs.
I would like to know if LA investors (specifically those investing in single-family and duplex/triplex properties) are able to realistically find these deals.
As an xample - Let's say a 3-bedroom, 1.5 bath home in North Hollywood is listed on Zillow for $660,000. And comps show an ARV of $760,000. And let's say the rehab estimate is $45,000.
So this would mean that the max allowable offer is $487,000. ($760k x 70% minus $45,000.)
I have a hard time believing that LA investors are finding and buying based on this example.
I would like to know if anyone in LA doing rehabs either to flip or as buy-and-hold investments are actually using this formula. Is anyone actually able to find sellers willing to sell at this discount?
OR are LA rehab investors typically doing deals and taking a smaller margin?
And a follow up question would be :
If my target investment property is a house-hack for myself, would I be well-served to ease off of the max offer of 70% of ARV?
If I'm able to make the number work to where my rents cover or almost cover my mortgage, AND I'm living in the house as well - should I be open to a deal doesn't meet the '70% of ARV' criteria?
any thoughts are greatly appreciated.