What does "cents on the dollar" mean?

3 Replies

I'm hoping this isnt a stupid question but what does a wholesaler mean when they say you need to buy "so and so" cents on the dollar? How do I estimate that? How do I figure out my equity range and or potential profit from a sale price and ARV? Is there a simple math equation I can follow

I'd avoid wholesalers.  They are basically trying to buy something cheap and then flip it without doing anything selling it for a higher price to the next person.  If they say 20 cents on the dollar, that means for every dollar it is worth, you pay 20 cents.  so a $100K house for $20K.  If it sounds too good to be true, it probably is.  Do your own due diligence.

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Cents on the dollar or pennies on the dollar is simply a discount.

You want to buy at minimum 65-70% ARV minis the repair costs. This will leave you a 20-25% profit after other expenses.