All these issues come in the playAnother one of my favorite creative financing situations is a "joint venture with the seller" where there's minor repairs needed and they don't have the money to repair the houseWhat say you have a $200,000 house, and 20,000 in workWholesaling is 70% of ARV or 140,000 minus 20,000 in work minus 5000 in Wholesaling assignment fee, $115,000 to sellerFor minor rehabs that's a tough offer to get accepted and owners laugh at it, or perhaps get insulted by itWhen I talk to sellers of minor rehabs I show them this formula and tell them that that is only one choice, another choice is doing a joint venture with them, where are use my private lender money to fix the house, and I give them a note that will pay their equity, but  in three months timeTo figure out how much to give them a note, you subtract the cost to sell minus the rehab minus the private lender money interestIn this example you would subtract 20,000 in rehab -10% to sell with commissions and closing costs or $20,000 minus a joint venture fee of $10,000 or totaling $50,000So instead of 115,000 for the sellerYou get the seller 150,000 and you make 10,000--------Next post in this thread is talking about how to negotiate with homesellers for creative deals, getting a letter of intent for the seller draftedand then getting the contracts drawn by a talented contract  attorney

I typically subtract 3%, of the ARV.Realtor Fees: What is the commission you are willing to pay your listing agent (unless you are the listing agent) and the buyer's agent.

I've heard that expenses are always more than you plan for, especially when using a property manager that makes money when you make repairs.in nicer B and A props you can include the vacancy factor into your 50% not subtract.. but 50% is a good rule of thumb up to rents of 1000 to 1200  when rents go lower it can be a higher %.. 

It rented at $725/month but subtracting out the HOA the net rent is $536.50/month.$536.50/($16,000 + $200) = 3.31%

You either add or subtract amounts in these accounts to show how funds are used.

For our budgeting purposes we will assume the low end of $750/month.We are also factoring in the following things into our anticipated annual profit numbers: two months lost rent due to tenant problems, two months rent lost to save for repairs, subtracting water,sewer, trash, & taxes.

So if we subtract the sales cost from the sales price we get 277kFrom that we subtract the cost of the land.277k - 40k= 237kAssuming the builder made a profit let's subtract that guesstimate 237k - 40k = 197k build cost all in.

After subtracting the expenses of $480 from a rental rate of $950, I just see the $520 net/month. 

Subtracting closing costs, repairs and your desired profit then gives the MAO.You could try it again assuming the investor is using leverage, but I'm not sure that will help much.

I typically subtract 3%, of the ARV.Realtor Fees: What is the commission you are willing to pay your listing agent (unless you are the listing agent) and the buyer's agent.