What makes a good home to actually make offer?

Question

i went out into the field used a rule of thumb. Saw a home that needed a lot of repair not good...so moved to another and saw for 150,000 used the 70% rule needed about 5000 in rehab. What would be good offer for home like this? Is a garage a must to be a good home. When I show analysis to fellow investors I want to make it look like its good but anyone help me out. Appreciate it...I'm not giving up!

Earl Louis · Answer

Very informational Chris and Sean thanks so much now I have a better understanding of finding comps, ARV, and MAO is now! Dang I was confused lol but I got it now. Thanks guys for the help I appreciate it

Earl Louis · Answer

yes thank you very much for the info everyone

Christopher Brainard · Answer

@Earl Louis

The sale price of $150k is meaningless to you as an investor. You need to look at comparable properties and what they sold for in the area. If they had garages, you need a garage or need to adjust your price accordingly. That goes for all the home's features. Once you calculate the actual value of the home based on the comps, you take 70% of that (or whatever your local end buyer's prefer) and subtract out the repair costs. I should note that unless the home is in really good condition, repair costs will exceed $5k. Accurately determining repair costs is probably the hardest part of learning to buy real estate. So, if the home is really worth $140k and you have $20k in rehab costs, you would be offering $78k.

-Christopher

Earl Louis · Answer

i here from BP about using 70% for analysis and wholesale

Charlie John · Answer

@Earl Louis

Why do you use the 70% rule in the first place

Earl Louis · Answer

im doing wholesale..... Well and flip as well. I believe I just need to keep that rule of thumb in mind

Adrien C. · Answer

what are you trying to do? Buy something to flip, wholesale, or keep as a rental?