What is the avg percentage of cost a fix and flip buyer is looking for now?

[Minx Petry]

If a rehabber is looking for a property can anyone tell me what they are willling to pay in this market, let's say the metro area. Would 70 cents on the dollar or less?

 

Does it depend on how much rehab is needed. For example if its a total renovation they want to get it at 50 cents and if it's cosmetic they would be ok with 70 cents on the dollar? Or is it total ROI they are looking at?

[Brian Mann]

The 70% rule is used less now.  The real estate market is still in a decline in most of the metro area. It is not unusual to see prices drop 1% a month from the value that you thought you could get when you first looked at the proforma. Prices for the goods to fix properties have been rising lately as well. It is better to be safe with a 60 -65 % instead of 70%. Go on the bus rehab tour on Saturday with Nick, Glen and Tebor.  It is an inexpensive lesson and you will bond with others on the bus. These relationships are important to build to help you grow. Best of luck. Brian  

[Donovan Walton II]

It depends on the investor. Some investors who have to borrow money have to buy with the lenders requirements (ie hard money and other "quiet cost") , Some investor may use their own money. Some investors will not do a rehab unles they will profit "X" amount of dollars.

So it is a combination of everything u have metioned.

 

Cost of money , amount of work needed , holding cost ( taxes , insurance, etc.)  are very important when buying. so an overall percentage is important but there are other important factors to calculate for when buying.

 

hope this helps

[Jayne Garner]

You have to get the ARV after repair value and minus repairs and fees.

Than you will have a maximum allowable offer.  Good luck.