Formula For Buying Property?
This is extreamly confusing, so can someone please break this down for me?!
What is the formula for buying property - after repair value - repairs - holding cost - propfit margne = max. alloweable offer
And how can I tell what difference between the fair market value and the tax value on property. And how can I get the fair market value?
Again, please let me know about this.
To Nancy - Thank you for the advice on buyers agents it helped. Thanks again
Darla :-? :-? :-?
For Fair market value just take the houses that have sold in the area that are close to yours in size and amenities, then divide it out by the square fottage to get a per square foot price. The take that per square foot price and multiply it times the amount of square footage your house has.
Your formula that you are seeking depends on what repairs are needed.
Good Luck,
Kyle
FMV.... not easy to judge, unless your in a neighborhood with similar properties and recent sales history. Then per square foot comparison to value, -6% for agent commissions. Sales history of that property itself would also be important to me.
More importantly is, What should you pay for it? Depends on your goals and local markets. I look to pay no more than 80% of what I think a property would be worth with minor improvements, and no more than 7x anuall income (gross/projected). For project properties. Higher premiums for new or like new construction
The formula that most use is a 75% FMV. Here's a quick scenario. You have a house that would be worth $100K if it was in good/great condition. You can puchase the house as is for $65K. It will cost $10K to make the necessary repairs. That would fall perfectly for your formula. 70% of 100K is 70K you pay 65K + 10K repairs.
The amount of the percentage is up to you, I think 75% is a general rule. Fluxuate it up or down depending on the project.
Hope this helps some.
Dan
Hi,
Tax value is what the county or city you live in appraises property for tax purposes. FMV(fair market value) is the price houses are selling for in any given area...usually a realtor can run comparables for you... 3 recent sales within a 1mile radius of houses matching yours ( number of beds, baths, sq footage ect) you then get a figure giving you an idea in what price range you can expect to sell youre house. Usually i just go on my counties website (tax collector) and plug in the property address and also the addresses of neiboring residenses and it will give me last sale price...this works well for me since I work alot with condos.For houses I suggest getting to knkow a realtor or appraiser. I look for the most recent sales I can find (withing last year) for residenses or in my case units that match the one im interested in. this will give you an idea what you can sell for and also how much to offer if youre buying.