Wholesalers & Birddogs: If you would like to submit a wholesale deal or lead, please review AARE’s criteria.
A. RENOVATIONS & TEAR DOWNS:
We typically will only purchase homes that meet the following guidelines:
1. Residential, 1 to 4-unit homes
2. Purchase Price is no more than up to 75% of after-repaired value (this ranges from 60%, depending on market cycle and town).
3. In select, “sell-through” towns in Massachusetts & New Hampshire (these are towns that typically have a “days on market” ratio of under 6 months).
4. Are in good school districts.
5. Have no significant DEP / Environmental Issues
B. MULTI-FAMILY ACQUISITIONS:
1. 6 units to 150 Units Considered, currently all along the East Coast states (Maine to Florida), PA & OH
2. B, C or D class buildings located in B or C class areas
3. Mixed Use considered, but only if majority is multifamily
4. Area must have vacancy rate no greater than 10%
5. Asset must have at least one “value-add” to increase value
6. Target cap (pre-stabilization) is 10%, 12% & 15% (market-dependent)
7. Target cap (post-stabilization) is 6%, 8%, & 10% (market-dependent)
8. DSCR (when stabilized) cannot be lower than 1.25
9. Parking must be available, or an option for parking is available
10. Have no significant or lasting DEP / Environmental Issues
For us to consider your deal, you need to provide the following information:
- What the house will sell for after it has been rehabbed (ARV).
- The total rehab cost.
Calculating AARE’s Maximum Allowable Offer (MAO)
Maximum Allowable Offer 70% RULE
ARV x 0.7 (70%) – Rehab = MAO
$600K ARV house that needs $100K in rehab
$600K * 0.7 = 420K
$420K – $100K = $320K Maximum Allowable Offer (MAO)
Finding the After-Repaired Value (ARV)
Use valid comps from your investor-friendly agent. (At least 3-5 preferred).
AARE Solutions criteria:
- Within 0.5 miles
- Similar Style
- Same # Bedrooms
- Same # Baths
- +/- 200 sq ft
- +/- 10 years in age
- Comps from last 3 months
- **Adjustments made for differentials