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Saving The Planet One House At A Time G r e e n E a r t h E q u i t i e s . C o m 1 1 Does this add value for a wholesale transaction? 2 2 Saving The Planet One House At A Time G r e e n E a r t h E q u i t i e s . C o m This is the text I sent back to the Realtor. 3 3 4 4 Text Saving The Planet One House At A Time G r e e n E a r t h E q u i t i e s . C o m 5 5
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SavingThe PlanetOne HouseAt A Time
G r e e n E a r t h E q u i t i e s . C o m1
Welcome toPlanetSavers University Teleclass #1Today we will look at a “Real Deal”And analyze it thru the eyes of the
CMA or Comparative Market AnalysisThis form should be provided to you by your Realtor. Dont leave home
without it. The following slide showed up in my email. Let’s take a look.
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Does this add value for a wholesale transaction?
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This is the text I sent back to the Realtor.
It is always the questionYou need to ask.
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Text
These are the two listings on Winery
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This means you can buy a property and agree
to fix it without paying before the close of escrow
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Contractor’s Bid to get theproperty to Ground Zero = Ready to start Renovation
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The Other Address on Winery from the CMA
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Boarded Up = NiceNotice square footage. Is it the conversion?
Pool - liability & money pit
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Bad CompsToo far away and too old,2-1, & 3-1’s aren’t comps
Cyberhomes is usually better than this!
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More Bad Free CompsToo far away
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Conclusion: The Free sites sometimes Have valuable info, but not as good as a
Well selected CMA from the MLS
Get a good Realtor for your team
Or Become One.
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Let’s make an offer.
Back to the CMA
The CMA is the best singleStarting Place to Start.
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24Median is skewed by the REO’s Use These +$10
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Observations:Separate the REO’s
From the “normal houses”The last two are similar
Our Renovation willMake it worth $10-20K more.
This will be our ARV
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ARV = After Repaired ValueThis is the common term used
By InvestorsNext we want to calculate
MAO = Maximum Allowable Offer
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Basic FormulaMAO = ARV * .70 - Renovation
Safer FormulaMAO = ARV * .65 - Renovation
These are MAXIMUMsOffer less, do the counter dance,
Then negotiate again.
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ARV = $130,000*.70 = 91,000
Fire repair = -10,400Renovation = - 40,000
MAO = 40,600
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RememberUsing .65 instead of .70 is a safer
formula for beginners.
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Another Method1. Start with ARV = $130,0002. Multiply by .85 = $110,500
(this .15 covers comm, closing & carry)3. Subtract desired profit = $20,000
4. Subtract the repairs = $50,4005. MAO = $40,100
Here your profit is visible and it’s all you have to make mistakes with!
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This is “Live Ammunition”A real deal that someone could do.
GEE will not be offering on this property as it is not in our target area.
Let us know next week what Happens and which of these houses is a better buy. (I would offer on both)
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Next Week Another Real Deal in the next stage:
Negotiating Round 2 in the Due Diligence Stage
After the first price is accepted.It will be a house that I have
currently in escrow.
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