ARV practice Test (3): How are my results?

[Octavia D.]

Getting a lot of good feedback from you guys including through PM, I've been practicing more and more to understand the numbers to get it right. Here is another sample (not real) deal, did I get it right?

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Ask: $150k

ARV: $200k

$150k divide by $200k = 0.75% (ARV)

$200k x.70% - $10k rpr - $20k pft. = $110k (MAO)

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Knowing there's expenses the rehabber has that I remember reading a wholesaler has to consider, such as:

$$$ - Buy ( Assign fee. + MAO)

$$$ - Closing costs (4% / 5%)

$$$ - Fix up

$$$ - Interests ( possibly from a hard money lender)

$$$ - Holding (for sale, 6 months probably)

$$$ - Re-sell (retail price)

$$$ - Rehabbers Profit ($10 - $25k)

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Would it be ok to include in the ARV formula the % of closing costs of the ARV that the rehabber would possibly pay (ARV x.70% - rpr - 5% closing - pft = MAO) or not.?