|
If $300k is a solid After Repair Value and $50k is a rehab number from an experienced investor who has walked the property, then figure:
$300k minus
$50k rehab
$18k (6% RE commissions at final sale)
$1,500 (estimated local closing costs for title/escrow)
minus
short term hard money for acquisition at 4% of purchase price
interest on hard money loan for the duration of rehab time and time on the market, at 8 or 9%
minus
utilities costs for the duration of rehab time and time on the market
insurance costs for the duration of rehab time and time on the market
minus an expected/acceptable profit
minus whatever amount you believe the property must be discounted vs. other similar properties in order to get the house sold quickly.
= MAXIMUM offer price for the house "as is". This is the MAXIMUM that you can pay for the house.
|