figureing the bottom line offer

[joseph44]

Hi Everyone,I need some help:I have been talking with a lender about a HML
loan here is cenerio:ARV $260,000 x .7 =$182,000 mortg -$35,000 fix/up -$10,000 closeing -$12,000 holding comes to $125,000 he is telling me I should deduct my profit from my offer of $125,000 this doesn't sound right to me.The home was a foreclosure and an investment company has it.Is this right how can I deduct my profit yet.Need an answer ASAP.Thanks all and have a great wk/nd.:SM123:

[brianb_cobbres]

Hi Everyone,I need some help:I have been talking with a lender about a HML
loan here is cenerio:ARV $260,000 x .7 =$182,000 mortg -$35,000 fix/up -$10,000 closeing -$12,000 holding comes to $125,000 he is telling me I should deduct my profit from my offer of $125,000 this doesn't sound right to me.The home was a foreclosure and an investment company has it.Is this right how can I deduct my profit yet.Need an answer ASAP.Thanks all and have a great wk/nd.:SM123:



There is one big gaping hole in your formula. What happens to the $78,000 you have hanging out there after your multiplied $260,000*.7?

Thats where you profit comes from as well as any resale expenses.

$78000 margin
-$18000 realtor for resale
-$12000 carrying costs
-$10000 closing costs

Total Expenses $40,000

Profit $38,000

That also means you can increase your offer which increases you likely hood of getting the deal in the first place.

[joseph44]

Hi again Brian,In my post I already deducted my closeing and carrying and fix/up only one I didn't cover was realtor.I would start to sell buy owner 1st.
I know the less cost is better.Is this how it should look?$260,000 ARV x .7 = $182,000 -$35,000 f/u -10,000 closeing - $12,000 carrying -realtor $18,000 then are you saying my offer would be $107,000????Please explain your bottom paragraph and show me what you mean.(increase the offer) Thanks Brian for your time again I appreciate your help.Have a great wk/nd.

[brianb_cobbres]

No, I would go the other way.

$260*.7-$35,000= $147,000 max offer but that means some of the expenses will not be covered in the loan.


Here is a very simple question. $260,000 X .7 = $182,000 right?

Or $260,000 - $78,000 = $182,000 right again?

You see that $78,000, what is it being used for? Where is that money going? Right now you are not using it for anything so it is just sitting there and would be profit when you resold.

I have to go out for a bit, we can discuss this later.

[joseph44]

Thanks again Brian I must be haveing a senior momment what I'm trying to do is cover all expenses in the loan.This is 1st project after 1/2 I will not go this route.Right now I can not cover expenses.I'm trying to do this with out any out of pocket money.Please advise if this can be done.Thanks again till I hear from you.

[brianb_cobbres]

Thanks again Brian I must be haveing a senior momment what I'm trying to do is cover all expenses in the loan.This is 1st project after 1/2 I will not go this route.Right now I can not cover expenses.I'm trying to do this with out any out of pocket money.Please advise if this can be done.Thanks again till I hear from you.

You need to talk to your lender to see if he will let you roll all that into the loan. Most I have spoken with would not allow the payments or the other carrying costs in the loan although I did find a couple that held back part of the funds for payments and such.

Tell you lender what you are trying to do....