Calgary Realtor deal update from Edmonton event

[Dunga]

Here is a quick update on the four offers I submitted during the Quick Turn Real Estate event in Edmonton October 15 – 18. All offers were with $1,000 deposit and No Conditions, Ugly Houses in Calgary.Offer #1: Mount Pleasant ("Little Red Barn"). List Price $289,900; estimated ARV $340,000; estimated repairs $20,000; MAO $218,000. Submitted offer of $220,000 à Rejected, had received and rejected previous offers in the $240,000 range, the house is still on the market at $289,900.

Offer #2: Charleswood. List Price $374,900; estimated ARV $510,000; estimated repairs $30,000; MAO $327,000. Submitted offer of $310,000 à Rejected, competing offers and sold for $380,000 October 27.

Offer #3: Charleswood foreclosure (neighbour to offer #2 above). List Price $390,000; estimated ARV $500,000; estimated repairs $30,000; MAO $320,000. Submitted offer of $310,000 à counter offer of $380,000 à submitted final counter offer of $325,000 à Rejected, the house is still on the market at $390,000. Keeping in contact in case they change their mind J

Offer #4: Mayland Heights foreclosure. List Price $260,000; estimated ARV $360,000; estimated repairs $20,000 - $25,000; MAO $227,000. Offered $225,000 in sealed bid process à Rejected, sold for $275,500 October 26.

Not a whole lot of action but a great learning process. Thank you to all those who enquired about the status, and the new faces I met in Edmonton.

See you all at the December REIN event in Calgary!

 

[tbarcier]

Correct me if I am wrong, do you not base you MOA on ARV? To me your spread seems too large and offers are too low. For example #3 I see a MOA of 360000 allowing for 30000 repair and 10000 cushion puts you at 400000 sell at 500000 which is 20%. It just seems to me you could have made decent money on the asking price alone on most of these if your #`s are correct.

 

[JohnSoucie]

QUOTE (tbarcier @ Nov 5 2009, 03:25 PM) Correct me if I am wrong, do you not base you MOA on ARV? To me your spread seems too large and offers are too low. For example #3 I see a MOA of 360000 allowing for 30000 repair and 10000 cushion puts you at 400000 sell at 500000 which is 20%. It just seems to me you could have made decent money on the asking price alone on most of these if your #`s are correct.
I guess you didn`t actually attend the training.
do you not base you MOA on ARV.
No there is a formula of which ARV is a component
His MAO calculation on #3 is accurate at 320K and you never pay MAO. His offers seem just like Ron would have done.

John

 

[Dunga]

QUOTE (tbarcier @ Nov 5 2009, 01:25 PM) Correct me if I am wrong, do you not base you MOA on ARV? To me your spread seems too large and offers are too low. For example #3 I see a MOA of 360000 allowing for 30000 repair and 10000 cushion puts you at 400000 sell at 500000 which is 20%. It just seems to me you could have made decent money on the asking price alone on most of these if your #`s are correct.

Hi Thomas,

MAO = (ARV * 70%) - Repairs. So yes, MAO is a function of ARV. It is made up of 20% profit and 10% "variable "costs (closing costs, holding costs, sales costs, hedge factor, etc).

The offers submitted were on behalf of Ron LeGrand, while on stage in Edmonton, and I didn`t want to tell him he was low balling

Clearly the level of profit desired is up to the person submitting the offers. If you would like to I`d be happy to put in offers for you on the two remaining properties, or any other for that matter, at a price you deem suitable.

 

[tbarcier]

Ah I see Bent, I knew it was in there somewhere. Just trying to understand. Forgive me I wasnt telling you you were doing it wrong, just seems like a large spread. But I guess 50,000 on a deal would be enough for me, I`m not greedy.

 

[JohnSoucie]

QUOTE (tbarcier @ Nov 5 2009, 04:34 PM) Ah I see Bent, I knew it was in there somewhere. Just trying to understand. Forgive me I wasnt telling you you were doing it wrong, just seems like a large spread. But I guess 50,000 on a deal would be enough for me, I`m not greedy.

Thomas;

The spread sounds really big(and I`m sure people from the course are still wondering!) but I must say Ron sure painted a pretty compelling case for how lots of the profit can and does get eaten up based on his hundreds(thousands?) of rehabs or wholesale flips he`s done. He factors in 6 months for holding costs,etc. He has a pretty funny way of slagging the contractor who quits and then is replaced by another who has to clean up the mess and try and finish and then he can`t get that guy to finish and has to fire him.....it happens. He wants you to be able to make sure you get your minimum profit even when things go bad and that you leave something on the table for your wholesale buyer, for a quick sale and in case he hires the same contractors

He`ll keep buying from you because he was still able to make his profit.

John Soucie