All Forum Posts by: Erika Banks

thanks Bill and Karen!

Wow! Good points, Karen. I got repair estimates from 2 different contractors for the 20k. I pulled comps for the last 6 months within a few streets from the house. Comps show a range of 190-215 and about 4 months of inventory. I plan to finance the deal, looking at hard money lending (which may be a whole separate discussion) that would give me 70% ARV and charge about 14% with 2 points. How can I now use this information together to better my conclusion? Thanks

Erika

This is my first fix and flip, so help is greatly welcomed. I understand the equation for calculating a good deal offering price is (After Repair Value * 70%) - Repair Costs. But can someone help me understand the "range of acceptability"? For example, I've found a 4/3/2 in a great neighborhood. The ARV is 195k and has about 20k in repairs. Using the calculation, I should offer 116.5k. But, what if I don't get 116.5? What if instead the owner says 145? Is 145 still a good deal? Or is 116.5 my threshold? After 20k repairs on 145k, I would think the 30k difference (195-165) would still be a pretty good profit? Can someone clarify, please? Thank you! --New Flipper