Real estate broker Dave Leonti is associated with Keller Williams Realty in Kirkland, Washington. In addition, Dave (David) Leonti serves as project manager and owner of Casa Dolce Homes, where he manages construction and remodeling projects, develops budgets and timelines, and resells homes in a short time frame. This process, commonly known as flipping homes, can be a lucrative investment strategy if certain guidelines are followed.
Experts in real estate investments advise new investors to adhere to the 70 percent rule when evaluating a property. The 70 percent rule applies to distressed properties that are intended to be resold at a profit. To utilize the rule, investors take the estimated after repair value (ARV) and multiply it by .70. Then, estimated repair costs are subtracted, giving investors the base price that they should pay for a distressed property.
In order for helpful numbers to result, investors should make sure they use accurate and conservative estimates of ARV and repair costs. The numbers generated from the 70 percent rule need to be considered in conjunction with current, local market conditions.
Experienced investors often utilize more complex equations to determine the maximum purchase price for a distressed property. These equations factor in other costs such as additional repair margin, the costs of temporary ownership (taxes, maintenance, insurance, and utilities), and the costs associated with financing and closing.
Experts in real estate investments advise new investors to adhere to the 70 percent rule when evaluating a property. The 70 percent rule applies to distressed properties that are intended to be resold at a profit. To utilize the rule, investors take the estimated after repair value (ARV) and multiply it by .70. Then, estimated repair costs are subtracted, giving investors the base price that they should pay for a distressed property.
In order for helpful numbers to result, investors should make sure they use accurate and conservative estimates of ARV and repair costs. The numbers generated from the 70 percent rule need to be considered in conjunction with current, local market conditions.
Experienced investors often utilize more complex equations to determine the maximum purchase price for a distressed property. These equations factor in other costs such as additional repair margin, the costs of temporary ownership (taxes, maintenance, insurance, and utilities), and the costs associated with financing and closing.
