Evaluating Houses and Making Offers in Columbia, SC

[Najeriq Mentor]

70% of ARV - (Repairs + Assignment fee)

This I understand, however those of you in Columbia, Sc or surrounding areas would you say our market calls for a lower percentage of ARV? My partner has MLS access and I have FreedomSoft so we have no problem pulling accurate numbers. I'm considering evaluating houses at 60% of ARV to make deals more appealing and make buyers act quicker. However I do not want to leave piles of money on the table. Any suggestions?

[Gerald Harris]

This is a good strategy

If you want to really get it, stick to the 60% ltv.   

When I first started as a real estate investor i would think like a Hard Money Lender.

It was my experience that Hard Money Lenders we hard on Values and fix up costs. 

So do this:

In your pursuit of property:   Under estimate value and over estimate fix up costs

Example:

House has a value of 100k ARV (Really 110k to 115k)

Purchase price:  40k

Fix up costs: 15k (really 10k) (remember overestimate fixup costs)

Assignment fee for me on this deal:  5k

1.  My investor (end buyer) sees the numbers, comps, pics etc

2.  He sees 10k in repair but knows how over estimate fix up costs so he/she aren't caught off guard with repairs.  

3.  Knows I am hard on Value and he/she knows based upon my comps property is really between 110k to 115k

4.  I send investor pending sales in the area as well as sold comps so that can see how the area is trending.   

5.  Its a solid 5k for me.  maybe even 10k cause i set it up in a way that everyone wins

*The seller sells his/her house!

*End Buyer gets a deal he can fix and flip!

*I make 5k solid, maybe 10k!

Everyone wins!