All Forum Posts by: Loc Nguyen

That is, take 70% of the ARV, then subtract the rehab costs, and that's the most you can pay. If you pay that, and your costs are 15-20% of ARV, that gives you a profit of 10-15% of ARV.

I think Michael's forumla is off a little. Another way to calculate it would be

max price = ARV - rehab - all costs - desired profit

As stated above, you should end up with a total profit of the profit in the equation plus 30% of the ARV that's deducted up front.

ah i c so if there was a house for 100k ARV i take away 30 percent so its now 70k

subtract
Purchase cost 3k
rehab cost 12k
holding cost 3k
sales costs 5.5k
contingency factor 2k
Profit 10k

my maximum offer price is 34500 right ?

0 Votes

Yeah thats the same example this book i was reading had. So lets say my max purchase price is 50k and 15 k to rehab so i borrow it with 13 percent interest which is 8.5k in interest do i add that to purchase price along with all the other title fees and closing fees and so on ?

0 Votes

How do most of y'all calculate a maximum offer on a property ?

0 Votes

Originally posted by "slimmatic":

Holding costs is anything that you have to pay while "holding" (read rehabbing) the property. This could include mortgage or private lender payments, electric, heat, water and anything else that you pay during the time you own the property.

How long it takes depends on many factors. Some rehabs don't need much work and get done in a few weeks, and sell in a few weeks. Some take months, depending on who is doing the work, how much needs to be done and what you market is like.

You can finance the project via any source of funding. This can mean a bank loan, mortgage, credit card, hard money lender, private investor, HELOC, etc.

oic oic so let me as another question lets say i find a fixer upper for 60,000 and the ARV is 100000 and the repair cost is 20000, will the bank lend me money to buy and rehab ? if they do, what kind of loan do i ask for or do i make an investment proposal to them ? or do they ONLY lend money to buy the house and i have to find another source to pay for the rehab ?

0 Votes

My first question is i was reading a book and they had an example of the cost when doing the project and one of the was Holding cost can anyone explain this one to me, this is the cost of holding the house and paying the lender cost each month right ?

For the people who have taken on flipping houses how long did it take to complete one project from buying the house to selling it ?

is there any other way to finance the project beside other investors money and hard lenders ?

thanks again

0 Votes

Originally posted by "dafly":

When I buy at a great price I do refi and take some of the equity out of the property to buy the next one, HOWEVER I make sure that the property I am taking the money out of still has positive cashflow after I take the money out of it and I also will not go over 80% LTV. Usually I end up somewhere around a 75% LTV loan to keep the existing property still cash flowing on it's own. You want to have every property you own covering it's own expenses and putting some money in your pocket.

-Michael

Oic wow thanks guys really learning alot.

0 Votes

Originally posted by "Primo_Coach":

Loc,

Congrats for starting so young. I would begin to network at all of your local real estate investor associations. I would get as much knowledge as I can from the successful investors in the groups. I would also take them out to lunch and soak up everything.

Going to a REIA meet tomorrow im excited :groovy:

0 Votes

Originally posted by "pimpin80":

Again I'll give you a simple answer to a complicated question. It actually depends what your strategy is. If you are fixing and flipping, then yes it does make a lot of sense to refinance or borrow against equity, the interest rate will beat hard money anytime and that's good, plus when you're finished flipping the property you'll get your money back from the sale.

If you are a long term holder for cashflow purposes, then you'd be better off doing what MikeOh does, and that's buying properties that will cash flow with no money down and that have a chunk of equity in them already. Alternatively you could fix and flip some properties then reinvest the profits in rentals, although putting a down payment on a rental will dilute the returns, so this option is only second best to buying rentals that cash flow with no money down.

Hope this helps...

It does thx pimpin

0 Votes

Originally posted by "slimmatic":

If you are starting out, I think it is a good idea to get a feel for all of the options that exist in real estate. I would go on ebay and purchase Carleton Sheets course, for $20-$30. Read through this and listen to the Cds, and you will have a better idea of what is out there. From here, decide what your niche is, and pick up a book or course on that subject.

Overall, you will have a few hundred invested and should be ready to start doing some deals. Just please don't feel like you have to spend thousands of dollars on some guru course to begin.

haha yeah that what i was thinking of buying a "course" online that comes with like 12 audio cd for like 40 bucks i doubt i would ever pay anything over 1k on a RE course i rather read books , listen to tapes, and go on bigger pockets.

0 Votes

Do anyone know what is a good course for someone that is new in REI ? I was thinking of getting

Dolf De Roos' Real Estate Investor's College: Real Estate Investing for Everyone (Audio and DVD Success)

but if there any other recommendation i would really appreciate it, THX!

0 Votes

All Forum Posts by: Loc Nguyen

Loc Nguyen has started 11 posts and replied 35 times.

Post: Calculating maximum purchase price ?

Post: Calculating maximum purchase price ?

Post: Calculating maximum purchase price ?

Post: Couple of questions for rehab project.

Post: Couple of questions for rehab project.

Post: Appreciation question.

Post: Advice for the youngster ?

Post: Appreciation question.

Post: Real estate courses

Post: Real estate courses