70% ARV minus rehab costs

[Natalie Comoletti]

Is anyone in MA getting deals using the 70% of ARV minus rehab costs? I'm finding the numbers don't work in the current market? Any suggestions?

[Ted Lanzaro]

Hi Natalie,

The 70% of ARV rule is for when you don't have any of the three key leverage points of rehab.

They are:

Being a realtor - saves on commission

Being a contractor or handy - saves on labor costs of rehab

Having all your own $'s - saves on interest costs

Anyone who has more of these leverage points than you do can afford to pay more and outbid you.

The realtor/contractor couple with money can outbid you every time and still make the same/more profit than you.

Your own marketing and follow up - leads that no one else knows about - are the only solution to this problem until/unless you can add more of these leverage points to your own benefit.

I know this because I have been where you are now.

Hope that helps,

Ted