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Updated over 8 years ago on . Most recent reply
Are you moving to the 80% rule?
Just want to get a feel for what other investors in the metro are see in the market. Most of the deals I analyze, I use the 70% rule as a starting point. Are you still using 70% or are you moving up to 75-80% to be able to access a larger pool of properties. This is based on Single Families in st.paul/minneapolis area.
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- Lender
- Los Angeles, CA
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You should really learn to evaluate all the expenses and run the numbers, @Cha Yang. You'll find that for properties with an ARV less than about $250k, you will barely break even at a cost that's 80% of the ARV minus repairs. This assumes you are using hard/private money and paying commissions to an agent.
To a person, the experienced rehabbers we know who can't find a decent deal, will just sit on their money until they find a viable property. I suggest you take a lesson from them. Never think that this time it's different or that somehow the numbers don't apply to you. Anyone can make a bad deal.