maximum offer question

[kimesha]

i know how to come up with an estimate of the max offer if it is a rehab, but about if you want to rehab and keep as a rental. how do you come up with your max offer? do you just delete the cost of a resale?

[Dan Auito]

I would focus more on a percentage of profit desired, IE... 20%, 30% ETC... If you are absolutely sure that it will be an in demand rental at a certain rent rate then you might take the leap and deduct the sales costs. Remember though as an investor you should know how to buy and sell by owner! Those are two of your core abilities as an investor.

[Jim Johnson]

This is a great question because there are diffrent ways of looking at properties. When I look at a rental, I look for the cash on cash return. You ahve to look at rents - expences + debt payoff = a number. That number somehow is related to either what cash you just put into the property or down the road, what equity you have in the property. Cash on cash only works for a while, then you really must track cash vs equity. If you have access to an 'APOD' you will cut many corners in evaulating income property. The generic ways most Realtors have to figure out what a income property is worth is like holding your finger to the wind and trying to tell time. Ask for the 'schedual E', pump thoes figures into an APOD and you will know right off if the property your looking at is worth what they are asking.

I have 2 APODs, one very complex and the other from RealBenefits. This software will save you so much time and money you really can not afford not to use it.

i know how to come up with an estimate of the max offer if it is a rehab, but about if you want to rehab and keep as a rental. how do you come up with your max offer? do you just delete the cost of a resale?