Thursday, January 13, 2011

Pro Investor House Flipping With a Formula

House flipping by pro groups 

Professional investors with cash (house flippers) are known to be active here at Orange County trustee sale auctions after foreclosure.

Buying at public auctions after foreclosure has become popular, and buyers at such auctions, especially for low-priced homes, have serious competition.

Important questions for investors:  Can I do this investment purchase safely?  How much repairs are needed?  How quickly can I sell the property?  How much money can I make?

Professional investors sometimes work as teams, with an experienced REALTOR who helps find and coordinates the local deals, title company, contractors and real estate attorney.

The 65 Percent Rule - Some use this to decide whether a particular investment makes financial sense.  Multiply the after repair value (ARV) by 0.65.  Then subtract the total repair costs equals the maximum offer (MO).

house flipper formula

 (ARV x 0.65) - repairs = MO

After Value Repairs (ARV) times 0.65 minus cost of repairs equals Maximum Offer

Example:  If ARV is $200k, multiple that times 0.65, which equals $130k.  Subtract cost of repairs (hypo of $10k).  This equals maximum offer of $120k.


This is for information only and not the providing of tax or legal services.  Before becoming an investor at a foreclosure auction, you should consult with an experienced REALTOR and get your team organized. Then consult with your lawyer and income tax professional.

For information on investor seller and buyer opportunities for homes and real estate at Orange County, California, Newport BeachIrvineLaguna BeachCorona del MarNewport CoastHuntington Beach, or at Costa Mesa, contact us.  

Harrison K. Long - solutions for real estate and business - REALTOR® and broker associate, Coldwell Banker Residential Brokerage - 949-854-7747 (phone) - (email) - CA DRE 01410855 - SFR short sale and foreclosure resource certified by the National Association of REALTORs®.

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Please contact us about buying at foreclosure auctions and listing and selling of homes and properties at Orange County, California.  

Posted via email from Explore OC Homes


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