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Friday, January 7, 2011

Using the MAO rule for determining your
Investment Property Offer Price

As you know I run, along with my partner Luis Maqueira, the Miami Real Estate Investor’s Association MREIA monthly meeting every fourth Tuesday of every month.

One of the most common questions from our MREIA group is how do we determine the property’s value so we don’t pay too much? By paying too much would prevent the investor from making any money on the deal. Most investors want the deal to be a win-win-win for everyone involved in the transaction:
  • Win for Seller,
  • Win for the Investor,
  • Win for the Buyer that purchases
    the asset after it has been repaired.

The Maximum Allowable Offer MAO rule allows the investor to determine the property’s value so the transaction will be a win-win-win deal. It creates a maximum ceiling price for the investor. Go passed the ceiling and you won’t make money. It is always said among Real Estate Investors, "You Make Money on the property when you purchase it, not when you sell it."

Below is a brief video that explains how the MAO rule is processed and how the derived number is of value to the Real Estate Investor:



Written by +Bob Burns.

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MREIA's President
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Telephone #: 305-586-5280
email: sec8@planocho.com
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2 comments:

  1. Well explained on the max allowable offer. It is a good way of doing it with the extra 10% for possible margin of error.

    ReplyDelete
  2. Hey very nice blog!!
    good good…this post deserves nothing :( …hahaha just joking :P …nice post :P
    ohhh nice info.


    Real estate investors

    ReplyDelete