A common issue faced by real estate investors is calculating the right offer price to present to the property's seller.
You not only need to know a price the seller is likely to accept, but one which will also make the property a good investment for you.
DealCheck makes it easy to calculate the maximum price you can pay for a property to meet your investment objectives. This is often called your maximum allowable offer price (MAO).
Step 1: Open the Offer Calculator for a Property
Go to one of your properties and click the Offer Calculator link from the menu on the left side to access the Offer Calculator:
Keep in mind that this is a premium feature, available with the DealCheck Plus or Pro plan. Click here to learn more about these upgrades.
Step 2: Customize Your Investment Criteria
Next, enable and customize the investment criteria you have for this property.
For example, you may have a desired minimum cash flow, cap rate or cash on cash return for a rental property or BRRRR.
Or, you may have a minimum desired take-home profit and a maximum amount of up-front cash that would be required to complete a flip:
Step 3: View the Highest Offer Price
After updating your criteria, scroll to the top to see the highest price you can pay for this property to meet your criteria. This is your maximum allowable offer for this property.
The highest offer price shown can be lower or higher than the property's current purchase price. This is because DealCheck's Offer Calculator will increase the offer price to the highest amount that will still satisfy all of your selected criteria.
You will also see a discount from the current price that will be required, as well as the criteria that are limiting what price you can offer:
Tip: if you see a "Deal Not Possible" message, it means that it will not be possible to meet all of your criteria. Try disabling or changing some of them.
If you're using the Offer Calculator for a wholesale deal, the Highest Offer box shows the maximum price you can pay the seller of the property. You can also see the price you can then offer the property to your investors or buyers below:
Step 4: Update the Purchase Price of the Property
Once you have an offer price you're happy with, you can update the property's Purchase Worksheet with the new price and re-calculate all analysis metrics.
Click the Save the New Price button below the new purchase price to do this:
Note: the above screenshots were taken from our website, but the same features can be found in our iOS and Android apps as well.