rehabbing: Flipping Homes Formulas – Conventional Funding or Cash Purchase
- 10/01/08 01:35 PM
Buying, fixing, and reselling homes for profit is not an exact science. However, there are some general rules of thumb that most investors can use. Using Conventional Funds, or Cash (points for borrowing 1 point or less, and interest rates less than 8%) ARV stands for After Repair Value, or what the home will be worth upon completion of repairs. Maximum Offer = (0.70 X ARV) - Repairs Or Maximum Offer = (70% X ARV) - Repairs Example: A house has an ARV of $100,000, but needs $35,000 in order to achieve that value. Your highest offer should be: ($100,000 X (0 comments)