Updated over 4 years ago on . Most recent reply
Help with an ARV from a tax deed/wholesale deal
Hello everyone! I am calculating the ARV & profit on a property and would like to know if I am doing this wrong? This example is as if a property was in a tax deed auction & I bid and won for the purposes of wholesaling it & selling it to an investor who plans on flipping it her or himself:
Purchase Price opening bid $3,626.47
winning bid: $10,000.00
ARV $410,700.00
Discount x 70%
___________________________
$287,490
Repairs -$20,000
___________________________
Max Allowable Offer (MAO) $267,490
Profit $257,490
Comparables:
1st: $415,000
2nd: $410,000
3rd: 407,100
I feel as though I am doing something wrong. I am of course assuming that the winning bid is $10K which most likely won't be that low with an ARV this high but it seems wayyy too good to be true? These are actual number of a property at a tax deed auction coming up but I am using this for a mock analysis to attach to my business plan so If anyone has any pointers please let me know, thank you!