Not another question about the 70% rule...

[Jeremy Ferguson]

I am very familiar with how the 70% rule works and have read several posts about other variations of the rule. My question is for you other wholesalers out there.. 

When you are estimating your repair costs what are you including?

ARV * .70 - Repairs - wholesale fee - MAO

Take this property for example...

- 200k ARV

- Dated bathrooms and kitchen but everything is in good condition

- New carpets needed throughout

- Paint

Would you include everything necessary to get this property fully updated? The real question is are you including "Repairs" or "complete rehab" in your formula?

This is where I am confused when running the numbers to make an offer, I have come across a few properties that are in good condition but are just dated. So would you just factor in carpets, paint... etc. or price out everything under the sun? (new bathrooms, all new kitchen cabinets, countertops, appliances..)

[Andrew S.]

@Jeremy Ferguson 

It seems to me that this should be reflected in the the ARV. If you have an outdated but fully functional property, it will have a lower ARV than a modernized (and fully functional one). So, you either have a higher renovation budget, or a lower ARV