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Updated over 9 years ago,

User Stats

220
Posts
152
Votes
Michael Slockers
  • Real Estate Entrepreneur
  • Owasso, OK
152
Votes |
220
Posts

Modifying the 70% ARV formula to capture more contracts? Yes or no?

Michael Slockers
  • Real Estate Entrepreneur
  • Owasso, OK
Posted

I understand how and why to use a standard formula of 70% ARV - repairs - my wholesale profit when making an offer to a motivated seller.


However, I have some buyers who seem less interested in getting a great deal (30% equity position) on a property and more interested in just monthly cash flow (for example, they may be okay with a 5-10% discount if cash flow is where they need it).

For properties that fit those sellers' guidelines, I assume that I can work with a less motivated seller (maybe use 85% ARV - repairs - profit) and still make the deal happen?

Does this sound accurate? It seems this could still be a win-win-win.

I'm new to this and I've been talking to many quasi-motivated but not-quite-desperate potential sellers.

Thanks in advance!

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