PROPERTY OFFER WORKSHEET

The very basic question which usually arises in the domain of property management is how much should one invest and how much should be offered.Property offer worksheetproves like a guide in this manner. In light of this,the investors suggest clarification on the essential math that use to think of an offer cost for any given property. Regardless of how you cut it, your offer cost which signifies the measure of your beginning speculation and is going to assume a noteworthy part in the general extent of any exchange. With the right number, you’ll have a great hammer bargain staring you in the face. With the wrong number, you can lose yourself a great deal of cash in a moment. The majority of the general population who flip houses and purchase speculation properties use something many refer to as the 70% Rule – maybe you’ve known about it.

This is a basic numerical mathematical statement that takes the expected estimation of a property also known as after repair value, times seventy percent (0.70), less ALL costs, which will give you the “most extreme offer value” that you ought to consider for any given property. It bodes well on paper. You’re giving yourself a 30% edge, from which you’ll need to snatch your benefit. In principle, you’re composing yourself a pay check which is being drawn from this 30% contrast between your offer cost, and the property’s full market esteem.

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PROPERTY OFFER WORKSHEET

.Note this is used for properties making all-cash offers and NOT properties with underlying mortgages.

1. Retail repaired value(RRV)___________________________
2. % of retail repaired value your buyers will pay for property in inclusive of repairs______________________
3. Closing Costs Your Buyer Will Pay____________________________________________________________  I usually I estimate 1% of RRV which covers attorney fee, title search, recording fees and miscellaneous costs.  Points paid from your buyer on their financing may be as much as 3-5% but is not accounted for here.  That is one cost that my buyers either pay for out of pocket or some can roll on over into their loan if they have high enough LTV loan to budget in.  Rare for your buyer not to have to come up with no money out of pocket on a deal.  If they can, then you’re probably selling too cheap.  Your buyer needs to come to the closing table with something monetarily.
4. Minus the repair estimate
5. Minus “Murphy’s Law”                                                                     This will be be 3% of the retail repaired value.  Basically this is a catch-all for maybe something on the repairs you missed or “fudge” factor on comps, closing costs, etc…
6. Minus Your Profit!__________I usually try to get 5-10% of the RRV
7. Wholesale Offer_______________ RRV times % of repaired retail value your     buyer will pay minus:

           a) Closing Costs—-1% of RRV

           b) Repair Estimate—-straight amount and no percentage

           c) “Murphy’s Law” factor—3% of RRV
           d) Your Profit—-factor in 10% of RRV as your profit to begin with but
                 least amount you should accept is 5% of RRV.  Making offers this way
                 leaves your room for negotiation.  Always start with 10% because if
                 you don’t, then you really have no room to concede in negotiations.