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[ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] Re: Bidding formula for foreclosures Posted by Rick, the Probate Guy on August 25, 2006 at 9:59 AM In Reply to: Re: Bidding formula for foreclosures posted by Nate on August 24, 2006 at 7:43 PM : : offer him $135,000. therefore you could do 100% financing. you'd split the remaining equity (too greedy is trouble). remind him of his alternative with the cost of the the broker ($9000) wouldn't get much more. : : I'll do it with you and split the profit : John, : I guess that's more the question: HOW do I proceed in such a situation? I've done more the buy and rehab in the past, so this foreclosure situation is new to me. How did you arrive at $135,000? More importantly, what's the threshold? In other words, what if he owed $140,000 on the property, and it was only worth $165,000? When and what to offer or walk away, is more my question. thank you for the information ================================ The question to ask is: "How much profit do you need (intend) to make?" and then work it backwards. What are you willing to buy, capitalize, rehab, hold, resell and hassle with a given property? Would you do it for $100K net? $50K net? $25K net? $7K net? Figure all the things that you know that will either be debts to remain on the property or cash expenses including acquisition costs, debt service, fix up, holding costs, tax, insurance, and realistic cost of resale. Determine what you can give the owner for his/her interests. And pay youself, investors, and figure a fudge factor, too. I know that your next question is going to be, "...but wait, I don't know all these costs exactly! Or what the house will be worth in 2, 3 or more months." No, you don't. You'll have to estimate, guestimate, or project based merely the best information available at the time. I've never got it perfect, nor do I even get it always right, but I do get it going. So, get into the arena and do the dance, best way you can. Rick Follow Ups: Re: Bidding formula for foreclosures Nate 8:31 PM, 08/25/06 (2) Re: Bidding formula for foreclosures Joe 9:57 PM, 08/26/06 (1) Re: Bidding formula for foreclosures john wilson 10:30 AM, 08/28/06 (0) Post a Followup: Name : E-Mail : Subject : Comments: : : : offer him $135,000. therefore you could do 100% financing. you'd split the remaining equity (too greedy is trouble). remind him of his alternative with the cost of the the broker ($9000) wouldn't get much more. : : : I'll do it with you and split the profit : : John, : : I guess that's more the question: HOW do I proceed in such a situation? I've done more the buy and rehab in the past, so this foreclosure situation is new to me. How did you arrive at $135,000? More importantly, what's the threshold? In other words, what if he owed $140,000 on the property, and it was only worth $165,000? When and what to offer or walk away, is more my question. thank you for the information : ================================ : The question to ask is: "How much profit do you need (intend) to make?" and then work it backwards. What are you willing to buy, capitalize, rehab, hold, resell and hassle with a given property? Would you do it for $100K net? $50K net? $25K net? $7K net? : Figure all the things that you know that will either be debts to remain on the property or cash expenses including acquisition costs, debt service, fix up, holding costs, tax, insurance, and realistic cost of resale. Determine what you can give the owner for his/her interests. And pay youself, investors, and figure a fudge factor, too. : I know that your next question is going to be, "...but wait, I don't know all these costs exactly! Or what the house will be worth in 2, 3 or more months." No, you don't. You'll have to estimate, guestimate, or project based merely the best information available at the time. I've never got it perfect, nor do I even get it always right, but I do get it going. : So, get into the arena and do the dance, best way you can. : Rick Optional Link URL: Link Title: Optional Image URL: [ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] WWWAdmin 2.0a © 1997 Matt Wright and DBasics Software Company, All Rights Reserved

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