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Updated almost 6 years ago, 01/28/2019
75% ARV rule - How to be morally ok asking for extremely low valu
So I have heard both Brandon and David talk about their rule for brrrr investing. The rule I'm primarily speaking to is the 75% ARV
(After Renovation Value) rule. This means they are probably buying the house close to 50% less than the final ARV from the start. ( ex- final ARV of 100k means after Reno investor has 75k in property and if Reno is 25k that's a purchase of 50k). Where I'm struggling is asking someone to sell their home at such a drastically reduced rate even for prerenovation. I'm wondering if most folks are getting these properties from lenders/ through foreclosure/ or from private individuals? It seems through the podcasts I've heard, it's through individual owners ( off market or MLS). If from an individual, does anyone have a general rule/formula that can provide comfort to a seller they are being treated fairly? My concern are some of the people I have heard on the podcasts talk about being "likable" etc but don't speak to a fair deal... just a great deal.