Posted by bobnone | Posted in Home Buying & Real Estate | Posted on 20-08-2010
Tags: best real estate investment books, business, finance, investing, real estate investment books, realestate, real_estate, top 10 real estate investment books, top real estate investment books
Real Estate Investment Books ~~ Home & Real Estate Matters ~~
MAO is the “maximum allowable offer” that an investor should make on a property. The calculation is either 65% or 70% of the after repair value (ARV) less repairs and other costs. The MAO formula calculates an offer price that should allow an investor to make a profit while reducing the chance of losing money on the deal. This formula is mainly used for an all cash offer on a property that the investor intends to flip.
MAO = 70% * ARV – repairs – other costs
The range used in the calculation accounts for the investor’s skill in successfully completing a rehab project. Beginning investors should use 65% while more established investors can use 70% in their MAO calculation.
In order to be successful in flipping properties, there are two crucial costs an investor must be able to calculate: the ARV and the rehab cost. The ARV should be based on comparable sales in the neighborhood and/or the use of an appraisal. Comparable sales should be within the prior six months. Investors who do not have access to comparable sales should enlist the service of a real estate agent who can provide this data. This agent should be the same agent the investor will use when they are ready to list the property for sale.
The second critical cost is the estimate for the rehab. New investors can solicit three bids from contractors. The average of these bids will provide a reasonable expectation of the cost that can be used in the MAO calculation. Experienced investors are usually able to estimate rehab costs without getting bids from contractors. Regardless of the percentage used in the calculation, the investor should always pad their rehab estimate by 10% to allow for unforeseen repairs and potential cost overruns. The ARV should include the potential commission paid to the real estate agent. Most investors will list a property at 3-5% below market price to attract a quick sale.
Let’s look at an example of calculating MAO.
Investor finds a house that is in need of repairs. Recent sales in the area range from $96,000 to $102,000. The rehab estimate is $12,000. Real estate commission is 6% of the selling price.
ARV $100,000 70% of ARV $70,000 Less Rehab cost ($12,000) MAO $58,000
In the above example the investor can expect to sell the property at a 5% discount of the ARV for a quick sale or $95,000. From this selling price the investor can expect to pay 6% in real estate agent commissions. The net cash to the investor would be $89,300. When you subtract $70,000 (purchase price plus the rehab cost), the investor can expect to make a profit of approximately $20,000.
While using the MAO formula is not a guarantee of making a profit, investors who utilize the formula can reasonably expect to realize a profit between 15% and 25% of the ARV.
There are many ways to make a fortune investing in real estate. For more information about real estate investing visit my website at InvestInRealEstate101.
For access to three of the greatest books every written on personal development visit Your Free Gifts.
Real Estate Investing Books – Free Ebook- Find Private Lenders
|
|
FLORIDA SIlver Springs Real Estate Advertisement, Antique 1880s Print, Big Folio $99.95 |
|
|
Mastering Real Estate Mathematics $21.60 |
|
|
How to Find Hidden Real Estate Bargains 2/e $1.00 |
|
|
How to List Residential Real Estate Successfully $1.00 |
|
|
Construction Funding: The Process of Real Estate D $1.99 |
|
|
antique vintage estate gold earrings-natural real Peruvian Topaz gemstones $61.41 |
|
|
Oregon Real Estate Practices $4.39 |
|
|
Sunny Day Real Estate Shirt M emo jawbreaker samiam sub pop foo fighters $3.14 |
|
|
2 YEARS TO A MILLION IN REAL ESTATE – MATTHEW A. MARTINEZ (PAPERBACK) NEW $18.12 |
|
|
Best of all 50 States Real Estate Exam Prep $49.00 |
|
|
THE MILLIONAIRE REAL ESTATE INV – DAVE JENKS, ET AL. GARY KELLER (PAPERBACK) NEW $20.18 |
|
|
Calculated Industries Real Estate Master IIIx 3405 Business/Scientific… $15.00 |
|
|
Real Estate Finance $4.39 |
|
|
POCAHAUNTED MAKE IT REAL NEW VINYL LP BEST COAST WAVVES REAL ESTATE NOT NOT FUN $15.99 |
|
|
The ABC’s of Prospecting: The Ultimate System for Every Real Estate Sales Profes $6.95 |
|
|
Sold!: Direct Marketing for the Real Estate Pro, Lois K. Geller, Good Book $2.88 |
|
|
Stapleton’s Real Estate Management Practice (2005, Paperback, New) $126.24 |
|
|
Basic Real Estate and Property Law for Paralegals by Jeffrey A. Helewitz… $92.36 |
|
|
REAL ESTATE STICKER DAYS Mint Official Promo RARE CHEAP! $0.99 |
|
|
California Real Estate Company and Escrow Company – Licensed, Insured, Website ! $55,000.00 |
|
|
Guide to Real Estate License Examinations by John T. Ellis (1974, Book) PF10 $20.00 |
|
|
Supra iBox (blue Real Estate) $240.00 |
|
|
VINTAGE BROOCH PIN PEWTER HOUSE FOR SALE REAL ESTATE REALTOR VERY CUTE GUC !! $0.99 |
|
|
Getting Started in Real Estate Investing, 2nd Edition, $4.99 |
|
|
1920’s Vintage Ad MIAMI BEACH Florida FL Mansion REAL ESTATE agent HOME SALE ART $7.99 |
|
|
Big Money in Real Estate Foreclosures by Ted Thomas (1992, Paperback) PLUS! MORE $19.00 |
|
|
Antique vintage natural Blue Coral & real Topaz gemstones gold earrings, estate $62.48 |
|
|
PRACTICAL REAL ESTATE LAW $89.99 |
|
|
PRACTICAL REAL ESTATE LAW $19.99 |
|
|
Trump University Real Estate 101: Building Wealth with $7.95 |
|
|
Lot of four real estate instructional books $20.00 |
|
|
MORTGAGE BROKER Novelty Sign parking bank loan gag funny gift banker real estate $6.95 |
|
|
estate ” DRINKLESS ” imported real BRIAR TOBACCO smoking PIPE natural BURL old $15.00 |
|
|
Arizona Real Estate: A Professional’s Guide to Law and Practice by K…. $8.00 |
|
|
estate ” SUPERGRAIN ” imported real BRIAR TOBACCO smoking PIPE natural BURL old $15.00 |
|
|
estate ” STANDARD ” imported real BRIAR TOBACCO smoking PIPE natural BURL old $15.00 |
|
|
estate ” WEBER ” virgin imported real BRIAR TOBACCO smoking PIPE natural BURL $15.00 |
|
|
estate BBB SPORTS imported real BRIAR TOBACCO smoking PIPE natural BURL old $15.00 |
|
|
antique vintage estate gold Turkana earrings-natural real Amethyst gemstones $60.33 |
|
|
COMPLETE IDIOTS GUIDE TO BUYING A HOUSE REAL ESTATE ALPHA BOOKS 2ND EDITION $12.99 |
|
|
SHUDDER TO THINK/SUNNY DAY REAL ESTATE Tour Promo 7″ Sub Pop 1994 Dischord emo $10.00 |
|
|
The Millionaire Real Estate Agent Gary Keller Dave Jenks and Jay Papasan A+ SC $5.88 |
|
|
Real Estate Investing For Dummies by Robert S. Griswold and Eric Tyson (2004,… $5.88 |
|
|
Double Your Income in Real Estate Sales by Danielle Kennedy Hardback $5.88 |
|
|
Alan Cowgill Real Estate Private Lending 1, 2 & 3 Complete System $90.00 |
|
|
4C REAL AMETHYST SIDE OVAL ESTATE FILIGREE VINTAGE RING $0.99 |
|
|
Alan Cowgill Real Estate Private Lending Complete Bootcamp $60.00 |
|
|
Arizona Real Estate: A Professional’s Guide to Law a… $39.95 |
|
|
How To Succeed In Commercial Real Estate By Bowman, John L. $24.70 |
|
|
Complete Guide to Investing in REITS: Real Estate Investment Trusts-Mark Gordon $30.06 |
|
|
How to Become a Million Dollar Real Estate Agent in Your First Year: What Smart $33.29 |
|
|
2 Vintage Pysanky Pysanka Intricate Real Eggs Ukrainian Art – Estate Find $9.00 |
|
|
Ethics for the Real Estate Professional (Continuing Ed $23.26 |
|
|
Very Popular Real Estate Foreclosure Information Website Business For Sale $1.25 |
|
|
Real Estate Finance NEW by John P. Wiedemer $77.81 |
|
|
A Dudley Dowd Real Estate Boston Ovate Flag1908 Special Delivery Foxboro w3 $12.00 |
|
|
John and Donna MacNeil Real Estate Yellow Letter Marketing Find Owners Abandoned $79.99 |
|
|
Fortunebuilders Real Estate Than Merrill Rehabbers Reference Manual Rehab Retail $199.99 |
|
|
Bill Bronchick Flipping Properties Wholesaling Real Estate Flip Quick Cash $99.99 |
|
|
John Ulmer Real Estate Huge Profits in Private Lending Borrow Money From Lenders $124.99 |
|
|
Alan Cowgill Real Estate Private Lending Basic, Advanced & Wealth Management CDs $199.99 |
|
|
Conti Finkel Real Estate Find Close and Sell Subject to the Existing Mortgage $99.99 |
|
|
Richard Roop Real Estate Instant Marketing Tools to Buy $99.99 |
|
|
Conti Finkel Real Estate Negotiate Negotiating Deals and Contracts for Profits $189.99 |
|
|
Bill Twyford Real Estate Business Plan to Quit Your Job $99.99 |
|
|
Wendy Patton Real Estate Lease Option DVD Bootcamp Rent to Own Buying Strategies $129.99 |
|
|
Conti Finkel Commercial Real Estate Apartments Rental Income Create Cash FLow $199.99 |
|
|
Scott Scheel Colossal Cash with Comercial Real Estate Apartment House Investing $199.99 |
|
|
Jim J.G. Banks Real Estate Probate Secrets System for Buying Property Cheap $189.99 |
|
|
Michael Warren Real Estate Money From Bad Debts Bootcamp Liens Defaulted Paper $99.99 |
|
|
Barney Zick Real Estate Creative Financing Create Great Deals with Terms $119.99 |
|
|
Barney Zick Hidden Profits in Real Estate Options CDs $124.99 |
|
|
Bill Twyford Real Estate Mastering Your Telephone Skills Use Phone Scripts Buy $99.99 |
|
|
Alan Cowgill Real Estate Private Lending Where To Get The Money Cash Bootcamp $149.99 |
|
|
Mark Klee and Caryn McKinney Real Estate Bankruptcy Goldmine Work with Trustees $129.99 |
|
|
Albert Aiello Real Estate Tax Strategies Goldmine Cut Taxes Keep More Money Cash $179.99 |
|
|
Greg Dorriety Real Estate Bankruptcy Goldmine Strategies for Buying Property $129.99 |
|
|
Bill Gatten Real Estate PACTrust Land Trust System for Buying Houses Little Down $169.99 |
|
|
Conti and Finkel Pre Foreclosure Real Estate Buy Subject To Short Sales CD & DVD $199.99 |
|
|
Bill Bronchick Big Profits in Real Estate Lease Options Use Rent to Own Sell Buy $99.99 |
|
|
Mark Sumpter Real Estate Secrets of Short Sales Use Pre Foreclosure Strategies $149.99 |
|
|
Bill Bronchick Secrets of A Real Estate Attorney Lawyer Great Profit Cash Tips $99.99 |
|
|
Bill Bronchick Alternative Real Estate Financing Creative Solutions for Buying $99.99 |
|
|
Wendy Patton Real Estate Lease Option use Rent to Own to Buy and Sell Properties $199.99 |
|
|
Gerald Romine Real Estate Work for Equity Slow Flip To Maximize Your Profits $99.99 |
|
|
Getting Started As a Real Estate Investor $19.98 Getting Started As a Real Estate Investor by Real Estate InvestingThis product is manufactured on demand using CD-R recordable media. Amazon.com’s standard return policy will apply…. |
|
|
Crouching Tiger, Hidden Dragon $2.71 Hong Kong wuxia films, or martial arts fantasies, traditionally squeeze poor acting, slapstick humor, and silly story lines between elaborate fight scenes in which characters can literally fly. Crouching Tiger, Hidden Dragon has no shortage of breathtaking battles, but it also has the dramatic soul of a Greek tragedy and the sweep of an epic romance. This is the work of director Ang Lee, who fell … |
|
|
DVD Success Series: Dolf De Roos’ Real Estate Investor’s College $16.50 The DVD Success Series is a premium line of personal productivity recordings featuring acclaimed content from renowned motivators and success coaches and designed for people on the move.Ever wished you had the time for a one-on-one in-person seminar led by a world authority on real estate prosperity? With Real Estate Investor s College on DVD property investment guru Dolf de Roos demonstrates fiel… |
|
|
The 18 Mistakes That Make Real Estate Investors Go Bankrupt – DVD, Audio CD and Study Guide $995.00 A quick moving, 2 ½ hour course, that will help you discover the 18 critical mistakes that 94.7% of all real estate investors make and what you can do to ensure that you don’t go bankrupt from making the same errors. This course covers topics such as finding the right properties, ways to approach sellers, the secrets of obtaining financing, how to estimate costs and repairs, and major problems th… |
|
|
Streetwise Seller Financing: Sell Your Property up to 70% Faster $19.74 Help in selling your property… |
|
|
Social Media For Real Estate Agents & Realtors: Real Estate Internet Marketing- Using Social Networking to Grow Your Real Estate Business Fast $17.65 Unleash the Power of the Internet to Grow your Real Estate Business Quickly! Learn How to become a Real Estate Internet Marketing Giant & Dominate your current Real Estate Market using Social Media Marketing Expert Techniques and Strategies. This outstanding social media & internet marketing book teaches you how to connect with thousands of people via the internet & grow your real estate busines… |
|
|
Audio Success Series: Real Estate Invest $14.02 Make a date for financial independence by enrolling in Dolf de Roos’ Real Estate Investor’s College on audio compact disc. Let property investment guru Dolf de Roos demonstrate insider techniques and field-tested strategies designed to maximize property value for all levels of real estate investors as he shows just how frequently unique opportunities present themselves to those in the know. Coveri… |
|
|
Rich Dad Cashflow for Kids $39.95 Brand new in factory sealed box… |
|
|
Quicken Rental Property Manager 2011 – [Old Version] $73.09 It shows how your rental properties are doing and where you’re spending at a glance. The Intuit Quicken Rental Property Manager 2011 Software identifies tax-deductible rental property expenses so you can maximize your tax deductions. It shows which rents have been paid so you know who owes you money and stores lease terms, rental rates and security deposits for each tenant…. |
|
|
Dolf De Roos’ Real Estate Investor’s College: Real Estate Investing for Everyone (13 Audio CDs and 1 BONUS DVD) $13.87 … |