How flippers calculate house prices in Savannah, Georgia
What is a "we buy houses" company?
If you don't know already, a "we buy houses" company is one that is willing to purchase your home for cash. Also known as 'quick house sale' or 'cash buyer' businesses, these companies will generally buy your home in Savannah, Georgia regardless of its condition. There are generally two types of 'we buy houses' companies:
- Companies that use their own cash reserves to buy properties
- Companies that source a 3rd party cash buyer
How much money will a "we buy houses" company buy my house for?
If you're reading this article, it's probably because you'd like to know how much companies like Cash 4 Keys Home Buyers buy Savannah, GA houses for currently - don't worry, we've got all the info you need!
"We buy houses" companies like ours pay cash for your properties for one of three reasons:
- We buy houses to sell them for profit - or to "flip" them.
- We buy houses to sell the contract on the property to someone else for a fee, like a wholesaler might do.
- We buy houses to buy and hold them while renting them out to tenants, like a real estate investor.
So, how much cash we'll offer for your house is purely dependent on how much profit the house can net.
To determine how much cash we'll offer to buy your home, first, we have to think about a few things:
- What are the risks associated with the house? Before anything, we must consider how much we know about Savannah, GA - the real estate market, the house value in the neighborhood, and whether or not there are potential house buyers for the property!
- What are the selling costs associated with getting your house sale-ready? Before we buy houses, we need to make sure that the sale will turn a profit AFTER shelling out to make the house saleable.
To do this, we use the following formula: After Repair Value (ARV) - Renovation Costs - Holding Costs - Selling Costs - Desired Profit = Buy the House for Cash
But what do all these terms actually mean? Let's break it down!
After Repair Value is what the house will be worth after repairs and upgrades have been made. This is the first step to deciding whether we should buy your house. First, we'll estimate what house buyers will pay for the house once it's sale-ready. We do this by comparing the cost of similar houses recently sold in Savannah, GA to the ones we're buying. After that, we'll estimate the anticipated expenses for renovation and take that price away from the original estimated sale price.
Renovation Costs
This is the estimate we work with to budget the cost of renovation. These repairs could include electrical and plumbing fixtures, new flooring, painting of the inside and outside of the house, new baseboards, new kitchen and bathroom cabinets and countertops and appliances, interior doors and those leading to the outside, maybe a deck or patio, fencing, and possibly some landscaping.
Holding Costs
When we buy houses in Savannah, GA, we become responsible for the property's taxes, insurance, utilities, maintenance, and any homeowner association fees. These make up the Holding Costs of the property - the longer we hold onto a property before selling it on, the higher these costs will be and the less profit we can make.
Selling Costs
These can include things like staging the property with rental furniture, the cost of a photographer, or finding a real estate agent to market the property in Savannah, GA.
Profits
When we buy houses, we aim to make at least a 10-15% profit. That's 10-15% of the ARV (After Renovation Value).
Here at Cash 4 Keys Home Buyers, we are cash house buyers in Savannah, GA. Our business model is to help homeowners who need to sell a house fast (especially houses that need work) by buying your house for cash… then we and our local partners fix up the property, beautify the neighborhood, and sell it "move-in" ready to a happy new homeowner.
We pay for all of the repairs.
We pay for the closing costs.
We do all of the work, so you don't have to.
Our goal is to make the whole process no hassle for you, so you can move on with your life and put this house behind you.