All Forum Posts by: Alex Huang

I'm not familiar with what profit expectations wholesalers seek, but I'll assume atleast a few thousand dollars. So in this case, I would be expecting the house to fetch atleast $48,000 fully renovated.

$48,000 - ARV

x .65

= $31,200

($10,000) repairs

($19,500) purchase price

= $1,700 profit

Yes $60k should be your absolute max offer, though I would advise that for properties < 100k you aim for something closer to 65-70% of the ARV when doing the calculations. The reason is that cheaper houses have lower upside, but certain rehab costs stay fixed (eg a $600 water heater is still $600 regardless if it is going in a $300k house or a $100k house).

The 65-70% simply gives you a target profit margin and a little room for error / unexpected costs. 

It sounds like you're providing too much info to the bank.

All they need to know is that you have a house (should be in your personal name, fwiw) and that you are looking to do a refinance. Shop around for the LTV (should be able to get 70% at most banks, 80% at others) and understand each bank's seasoning terms. Some require you to hold the house for 6 months before they will refi.

Most investors are looking for something similar to what Jason said:

70-75% of ARV less rehab costs. Possibly 60-65% if the house is sub-$100k ARV.

So hopefully the house you bought leaves enough spread for you to make it attractive to investors. From there, you can determine your sale price and profit opportunity.

Good luck.

Estate sales are hit/miss. Sometimes you can find good value from a family member who just wants to get rid of the headache / hassle of dealing with a house. Other times you will get family members who are misinformed on the value of the house (eg they live in an expensive market themselves, see the deceased's 4/2 1500 sq ft house in middle-of-nowhere Nebraska and think it should be worth what it would fetch in their own market) which then creates drama and unreasonable expectations.

I would just be very confident in your ARV and rehab estimates. Don't skimp on paying an inspector a few hundred dollars to go through the property with a fine tooth comb. Get a formal inspection report so that you won't be blindsided by anything catastrophic that you might not be accustom to looking for.

 I'm talking about making offers on houses for sale.

Does anyone have any thoughts on offer strategies?

Specifically, I am wondering if it would be more advantageous (more likely to have your offer accepted) if you make an offer through your personal name in lieu of the name of your LLC. The idea is that sellers would be more open to the idea of selling to an individual (ie potential home owner) instead of a LLC who is obviously looking for an investment.

Any one with an ample amount of experience with both and who can share whether they've found it makes a difference or not?

I have a trusted team of guys up in the Dayton area (~1 hr away) that do a lot of work within that distance.

HOA is the obvious hurdle. The HOA may have a lot of baggage (lawsuits, unfavorable rules for owners, etc) that could make it challenging to sell to prospective buyers.

Using a first-hand example, I lived in a condo in Chicago for many years (I rented). Shortly after moving in, I learned that they had a pet policy that required the pet to be less than 50lbs. If at any point management suspects your pet is over 50 lbs, they reserve the right to have you go get it weighed. They also reserve the right to force you to get rid of the pet if it weighs-in at over 50 lbs.

As a huge animal lover, no way would I ever consider buying a condo in a place with rules like that.

As an alumni to the school, it's great to see someone investing around UC.

Would love to hear progress and updates. If you ever need any contractors or help, please feel free to reach out.