MAX offer for my FIX/FLIP? – Every day we’re asked, “How much should I pay for Atlanta Hard Money Loans from Hard Money Lenders?” One of our customers has purchased over 100,000 homes with the “65% Rule”
Two Formulas for Wholesale Offers
The 65% Rule for Hard Money Lenders
The 65% Rule calculates an offer price that accounts for the wholesale fee. Using the Fix & Flip formula example, the wholesaler would make an offer of $70,200 and charge a $5400 wholesale fee to the investor buyer (the difference between using a 70% rule and a 65% rule). Wholesale fees are not set in stone and market demand can influence the prevailing wholesale fees that end buyers are willing to pay.
| ARV | $150,000 | (Value of property after repairs) |
| Loan (Cost of Funding) | – 6,000 | (Origination fees, Closing fees, Interest) |
| Repairs | – 25,000 | (All expenses related to renovation) |
| Holding Costs | – 2,000 | (Insurance, Utilities, Taxes, HOA, other) |
| ReSale Fees | – 9,000 | (Realtor Fees – 6%) |
| . | $108,000 | ARV minus costs to flip |
| 65% Rule | X .65 | |
| $70,200 | Maximum Wholesale Offer |
$108,000 (ARV minus costs to flip) x .65 = $ 70,200 Max Allowable Offer when Wholesaling in Hard Money Lenders
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