Every seasoned investor knows the 70% rule and how to use it when making offers on real estate. But can you ever use a different percentage?
And if you can, what are the instances when you use a higher or lower percentage as a starting point for your offer?
How to make good offers is one of the most important things to know when you are a real estate investor. In today's video, I have some tips for when it's OK to deviate from the standard 70% rule.
Here's the Video
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Hi Matt – I think using hard money can play into formulas depending on how much the money is costing you and the area you are investing in. If I am buying in an area that is a little more of a border area, then I will often use 65% for that house. The other thing to consider is the ARV of the house. In general, the margins on lower cost houses is slimmer than on a more expensive house. In the end, it’s not a deal if you can’t make money. Don’t be afraid to trust your gut. Thanks so much for your comments.
Sharon
Matt Mortensen
on August 14, 2015 at 6:05 am
I love this! I had a similar standard but at 65% and in hindsight I wish I would have followed the 70% rule which would still have allowed for a satisfactory margin. My origins in receiving hard money for flips made me conservative and I’m a creature of habit. And as many know being too conservative can keep you from making money as easy as being reckless can. Awesome!! Love the 70 rule!!!
They are in different places. Send me an email so I ca attach them when I am back in the office. sharon@sharonvornholt.com.
Mark
on July 27, 2015 at 4:38 pm
Hi Sharon,
I saw you on YouTube and came to your site, you have some great information. One thing you had mentioned on your video was that I could find some forms like a property information form, Inspection form, sales and purchase contract, etc. on your website. I am having some trouble finding them, could you direct me to the right place? I am a new investor and am looking for all the tools of the trade.
Thank you!!
Mark
~ About Sharon
Hello from Louisville, KY, and thanks for stopping by my blog!
I love this business, and I am passionate about helping other people become successful real estate investors.
Come along with me on my journey as I create a business and a lifestyle that I love.
Every seasoned investor knows the 70% rule and how to use it when making offers on real estate. But can you ever use a different percentage?
Hi Matt – I think using hard money can play into formulas depending on how much the money is costing you and the area you are investing in. If I am buying in an area that is a little more of a border area, then I will often use 65% for that house. The other thing to consider is the ARV of the house. In general, the margins on lower cost houses is slimmer than on a more expensive house. In the end, it’s not a deal if you can’t make money. Don’t be afraid to trust your gut. Thanks so much for your comments.
Sharon
I love this! I had a similar standard but at 65% and in hindsight I wish I would have followed the 70% rule which would still have allowed for a satisfactory margin. My origins in receiving hard money for flips made me conservative and I’m a creature of habit. And as many know being too conservative can keep you from making money as easy as being reckless can. Awesome!! Love the 70 rule!!!
They are in different places. Send me an email so I ca attach them when I am back in the office. sharon@sharonvornholt.com.
Hi Sharon,
I saw you on YouTube and came to your site, you have some great information. One thing you had mentioned on your video was that I could find some forms like a property information form, Inspection form, sales and purchase contract, etc. on your website. I am having some trouble finding them, could you direct me to the right place? I am a new investor and am looking for all the tools of the trade.
Thank you!!
Mark