All Forum Posts by: Jason Hardin

What about price points though? If you are flipping a house aren't you normally trying to find ways to cut money? I just bought a new 50 or 55 gallon typical gas HWH and it was about $600 or so. Aren't the tankless heaters quite a bit more? I'm just going off of my foggy memory but we had also looked at those but when I saw the price I immediately went the conventional route. But I may be way off as it has been over a year now. I'm just curious to see what others may think that have flipped houses.

My wife and I are just getting started and I think it would be very helpful to get a coach that we could walk along with for a little while. I really just need someone that can answer emails. I get a lot of questions from time to time and I want someone that I can just send a quick email to. I'm the type of person that really needs to know the whole process before I jump in to something. It's a lot to take in at the moment but the little details are the things that I need answers to. Just simple questions really.

If anyone in the Springs area that has done some flips would like to kind of coach my wife and I please contact me and we can work out some sort of deal so you are in some way compensated for your time and emails.

Thanks

Jason

@Josh Cowan

Welcome! I too am just getting started in this along with my wife. We also live in the Springs. I was also in the military back in 99-03 though. Thank you for your service. Good luck in Real Estate! Maybe we could meet up sometime to talk about REI, not that I know much of anything right now really. :)

Jason

@Mike Cumbie, now I see the light :)

@Greg H., Yes the FHA 90 day rule is what I read and now I see if it's just selling to a buyer using an FHA loan.

Great thank you for clarifying all that for me.

@Mike Cumbie, @Greg H., @Chad McClain

Thank you all. I had just read that if you bought a HUD home you couldn't resell it within 90 days but I think now that I think about it that may have been back quite a few years now.

Great help! Thank you all again.

Ohhhh thank you for that info! How long is the grace period? Is this similar to the 90 day period for buying and selling a HUD home? I thought I read somewhere that if you bought a HUD home and rehabbed it you couldn't sell it again for 90 days?

I was browsing around my area just looking at houses for sale and I saw one that was a Bank/HUD owned home that needed some work but in the description it says only homeowner/occupants (no investors). How and why would they put that in there? If they want their money, why wouldn't they want to sell it to an investor?

How do they know I'm not going to buy it for myself or not? I have no intention of buying this home as I don't believe the price they want will be good enough to flip it but it just intrigued me as to why they wouldn't want any investors buying the home.

Thanks,

Jason

That post may be confusing, let me try to clear it up.

Let's say I have an ARV of $200,000, fixed costs of $25,000, Rehab costs of $40,000 and 10% profit of $20,000

If I use the MPP formula I come out with this:

MPP= $200,000-$25,000-$40,000-$20,000  So I should offer $115,000 for the house?

If I use the 70% rule I come out with this:

70% rule=$200,000-30%-$40,000 So I should offer $100,000 for the house?

If I use the MPP it seems I cut myself short of about $15,000 in profit

When do you use the MPP and when do you use the 70% rule?

Hello all, as you can tell by my soon to be question I am new to this game. I have got the book from J. Scott and it is great and I though I had a handle on the ARV and MPP but I just read a post on BP that confused me. When trying to figure out your first flip pricing and to see if it's a good deal do you use the 70% ARV rule or the MPP formula? Or are they the same thing?

Here are the two I'm working with:

MPP=Sales Price-Fixed costs-Rehab Costs-Profit

70% rule= ARV-70%-Rehab Costs

Here is the post I just read:

How to use the 70% Rule:

Say the ARV is $200,000.

You figure out these numbers by using the 70% Rule using this simple math:

• Take the ARV ($200,000) and multiply it by 70%. This equals $140,000

• Deduct your repair costs from that $140,000. Let’s say your general contractor told you that rehab will cost $40,000

• Using the 70% rule, you have now determined that the maximum price you want to pay (or MAO) is $100,000

Using the 70% will give you a healthy profit margin minus finance, carrying costs and unanticipated expenses. Usually 10% is for financing, carrying and other soft costs, while the remaining 20% is for profit.

And if you go over on your expenses or maybe get a slightly lower ARV when you sell, the 70% Rule cushion will make it really hard for you to not be in the money.

As long as you stick to the rules!

So do I use the MPP formula or the 70% rule? In the MPP formula do I just use 10% for profit? In the 70% rule do I need to subtract for profit or is that in the 30% extra since I already took that out? Am I just over thinking this now? lol