I don't understand pricing
I'mhaving trouble understanding how buying at 70% makes sense.
After Repair Value: $500,000
Your Profit $50,000
Rehabbed Buys for: $400,000 add in closing cost of 3% = $12,000
Rehabbed puts $30,000 into it.
Total invested= $442,000
Rehabbed sells for $500,000
- $442,000 for purchase and rehab
- $15,000 for closing
- $30,000 for realtor
$13,000 profitfor the rehabbed and that's for a really low rehab budget.
I don't see a lot of rehabbers doing that. Are my numbers wrong?
You're not buying at 70 percent of an after repair value, but at 70 percent of the current state, market value. J&J will say their pricing model will give you a rough estimate of the current state value of the property before any repairs force appreciation and value to come closer to rehabbed comps. So it's eliminating your need to run numbers for rehabbers who have their own business model. Purchase at 70 percent of it's current value and wholesale at 85%
@gabrielthomasjgmail-com, Thanks Gabriel, Great answer! How is the House Academy program going for you?