Welcome aboard Bruce, and get ready for the real estate ride.

San Antonio Real Estate

BELIEVE IT OR NOT, THERE IS A ++++  FORMULA ++++ FOR HOW MUCH TO PAY.

Scott Frank & Andy Heller in their epic undertaking entitled:

BUY EVEN LOWER -- The Regular People's Guide to Real Estate Riches, [2006], Kaplan Publishing, Chicago, Ill. 

give the formula on Pp 120.

---------------------------------------- 

MPP = FMV - R&I - OC - TID

----------------------------------------

where:

MPP = maximum purchase price

FMV = fair market value

R&I = repair & improvement costs

OC = other costs

TID = total investor discount

-----------------------------------------------------------

Try a situation you have been looking at.  We'll do an actual example in the near future.

Sorry about being anonymous by accident in the previous post.  I'm still learning this blog format. LOL

HINT

TID SHOULD BE 20%

HINT #2

YOU WOULD HAVE LEARNED THIS FROM ATTENDING YOUR AREA REIA [REAL ESTATE INVESTOR ASSOCIATION] MEETINGS AND POSSIBLY EVEN MET THE AUTHOR[S] AS WE DID AT THE WASHINGTON DC AREA REIA WITHIN THE LAST 2 MONTHS.

EXAMPLE

FAIR MARKET VALUE = $500,000 [BAR-RESTAURANT]

REPAIRS & IMPROVEMENT  =  $150,000

OTHER COSTS = 

          DOWN PAYMENT AT 10%, OR $50,000

           Hard Money Loan of $450,000 at 18% with 5 points, or  $81,000 simple interest and $22,500 for points for $103,500

            DISCOUNT PERCENTAGE OF 20% [OF $500,000] OR $100,000

----------------------------------------------------

tHEREFORE FOLLOWING OUR FORMULA, OUR MAXIMUM PAYABLE PRICE WOULD BE   500,000 -  150,000 - 103,500 - 100,000 FOR $$353,500 total off the 500k              

THEREFORE $500,000 - 353,500   ========  $146,500

thus using a hard money lender for 1 year at the above rates equates to a MAXIMUM PAYABLE PRICE of $146,500.

If that won't cut the mustard, then either hard money needs to be replaced with bank funding, renovation needs to be south of the border labor, or you need another deal.

Reading is GREAT

B U T    N O W     Y O U      N E E D   to work out your own sample deal.    

N O W        N O W        N O W