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I don't understand pricing

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(@jarrod-woodley)
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Joined: 4 years ago
Posts: 1
Topic starter  

I'mhaving trouble understanding how buying at 70% makes sense.

For Example:

After Repair Value: $500,000

Purchase: $350,000

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

 

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?

 


   
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(@gabrieljohnsonrei)
Member
Joined: 2 years ago
Posts: 3
 

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%


   
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(@anthony-c-palacino)
Member
Joined: 3 years ago
Posts: 3
 

@gabrielthomasjgmail-com,  Thanks Gabriel,  Great answer!  How is the House Academy program going for you?


   
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