A Bad Deal at 44% ARV?...

[Brandon Sturgill]

ARV $140,000

Purchase price $62,000

25% Down $13,050

Entrance Costs (lender fees and such) $2,500

Rehab $35,000

Holding $3,000

Exit $11,200

Mortgage Payoff $46,500

Desired Profit $25,000

Max Offer $1,300...

[Tucker Russell]

This is how I was taught...not saying its the only way but if your ARV is 140,000 then you - 20% for profit -10% for holding/misc. fees -rehab cost (and if wholesaling -wholesale fees) = MOFO maximum offer for ownership. unless its structured that you will pay off mortgage, then deduct that.

140,00 ARV

-28,000   20% profit

-14,000   for holding costs/ misc. fees or (16,700 entrance, exit and holding...your numbers)

-35000   rehab costs

=63,000   MOFO  not bad if you offered 62,000 but not so great if you structured in paying off mortgage! with your numbers it would be 140000 arv - 25,000 profit - 16,700 hold/misc fees - 35,000 rehab = 62,700 MOFO which still looks good to me.

Good luck and god bless