[Tien]

Say you use an agent to sell your fixed up property.

100% market value you market it at.

You lose 3% to buyer's discount on average.
You lose 6% to Agent commission.
You lose 2-3% in holding costs.
You lose 2-3% in other costs.
You lose 5-10% to repairs

So you see after all is said and done, your fixed cost is like 12-14% of market value PLUS REPAIRS depending on how much repairs are needed.

Now let's calculate your profit. You want to make atleast 20 000$ for any project you undertake for a medium priced range house, and more and more the higher the price range home you take on.

100 000$ house.
-13% in fixed costs.
-7% in repairs.
-20 000 profit.

You need to buy it at 60 cents on the dollar.


My general rule of thumb to buying properties cash is:

Maximum allowable offer = After repaired Value x 70% - repairs.