Wanted: Active Investors for Foreclosure Fortunes
Chicken Little may think the sky is falling, but seasoned real estate investors know that today’s market – while challenging – is also the kind that can create generational wealth that has the potential to change lives and futures.
Whether you’re a well-traveled and seasoned investor or you’re testing the real estate investing water for the first time, one of the smartest things you can do in today’s market is explore the very real profit potential available in foreclosures. For it to work, though, you have to know how much to offer in the first place. If you know that, you’ll know at a glance whether you and a troubled homeowner might be able to come to terms on a purchase – or if you’d be better off walking away.
There’s a simple formula I recommend you put into play today. It’ll make your life easier and will make foreclosure investing decisions as easy as hitting the “enter” key on a calculator:
ARV (After Repair Value) X .60 – Repairs = Maximum Offer Price
Here’s an example:
ARV $140,000 X .60 = $84,000 – Repairs ($20,000) = Maximum Offer Price $64,000
Keep in mind that this isn’t what your opening offer should be. You’ll need to leave yourself some wiggle room for the negotiations that are sure to come. Even the most motivated seller will try to negotiate on price, so always begin by offering less. Then you can increase your offer price until you hit your ceiling. If they accept a lower price, you have even more cash to pocket when you refinance – or equity if you decide to hold the property. If not, you’ll know when to walk away from the deal.
Either way, you’ll know early on whether the property is worth taking a second look at. There are obviously other factors that will weigh heavily on your ultimate decision as to whether to buy the property or not, but this at least gives you somewhere to start.
So grab your trusty calculator and crunch the numbers. There are some great deals out there. Find them today and turn massive profits tomorrow!
Blessings!
Charrissa Cawley
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