For this specific deal, the house is located at 108 Fern Court. It’s a beautiful home over in the resort area. Jay bought this house 3 weeks ago and they are already finishing the rehab next week.
First the numbers: he bought this house for $266,000, with a rehab cost of $20,000.
The After Repair Value (ARV) is $375,000.
Let us pretend that Jay did not buy this house yet. Here is the possible Maximum Allowable Offer (MAO) for this house, $300,000.00 minus repairs of $20,000 that will be a total of $280,000 for MAO.
But sometimes there are also some unexpected repairs that you did not count on. So to cover this Jay always prepares a buffer of $10,000. By doing this, it will give him the most decent amount that he will pay.
So the amount now that Jay would almost pay is $270,000.
But how much did he actually pay?
Yes, $266,000! He actually paid less than $4000 than what his formula for getting the MAO calls for.
But this is not the end yet, If you want to know the full details of this deal, and want to learn how he earned $89,000 on this deal, just watch the video.
If you want to learn how to get funding for your deals using private money, get on over www.JayConner.com/trial for 30 days of free access to Private Money Academy.
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If you're interested in learning, step-by-step how I made $89,000 profit on my most recent real estate deal. Stay tuned.
Well, all right folks, I have got a present for you. That's right. Just for tuning in ere you may be watching on the live stream, or you may be watching us on YouTube, or you may be listening to us on iTunes, Google play, whatever. Doesn't matter how you're tuning in I'm Jay Conner the Private Money Authority, and I've got a gift for you. And that is as, if you are interested in getting funding for your deals without relying on banks, without relying on any kind of institutional money, then I have got a free two week trial for you to come check me out at the Private Money Academy membership. And at the Academy membership, we go live twice a month on Zoom coaching calls. And we've got right now almost 200 Private Money Academy members. And we interview my successful students. Talk about how we find deals, how we got our deals funded and et cetera.
So here's how you can come join the party. In fact, if you're watching live, the very next one is tomorrow afternoon, Wednesday at 4:00 PM Eastern time. And here's how you can get invited get right on over folks to after finished to www.JayConner.com/Trial. If you're brand new to the show Real Estate Investing with Jay Conner, we talk about all things that relate to real estate investing. We talked about single family deals, commercial deals, self storage land, and all the above and all the below. So listen folks, if you're brand new and we really appreciate it for you to subscribe, rate and review, like and share if you're on YouTube, be sure to subscribe and hit that little ring, that little bell button so that when we go live, you don't miss out on all this Real Estate Investing education.
Again, if you're new, the reason I'm known as the Private Money Authority is because from 2003 to 2009, when Carol joy and I started investing in single family houses, we've rehabbed over 400 of them now, here in Eastern North Carolina, I relied on local banks and mortgage companies to fund our deals for the first six years. And in January, 2009, I got cut off from the banks with no notice along with the rest of the world. So I had to find a better way. And I was introduced to this wonderful world of Private Money, which again, it's got nothing to do with banks, nothing to do with any kind of institutional money. It's got nothing to do with hard money. I'm not talking hard money. I'm talking private, private money, which is very, very different. So I've got Carol Joy, I've got 40 some private lenders right now funding our deals.
And we always come home with a big check. When we buy a house, we never have to take any of our own money to closing. So again, if you want to learn those types of techniques and strategies, when we finish, get and come on over to the free trial again at www.JayConner.com/Trial. What's on today's show? We are talking deals to be specific. We're talking about a specific deal. So when I opened up, I said to stay tuned. If you're interested in learning how I am making I'm in the process of making $89,000 profit, less carrying cost on this particular house. So first I want to give you the numbers on this deal. So the house is located right here in Pando Shores at 108 Fern court, So let's go over the numbers first.
So if we're watching there on the video, Scott, I'm gonna let you put the numbers up in the order that we went over them. So I want you all to be taking notes and writing this down. So I bought this house beautiful home over in the resort area over on the Island. I just purchased it and listen, folks. I just bought this house three weeks ago tomorrow. I've had it less than three weeks and we're going to be finishing the rehab. My crew leader just told me next week. So we bought it for 266,000, the rehab right around $20,000. So this is not a big, huge, you know, I mean, this is all cosmetic. We're putting down brand new luxury vinyl plank flooring throughout the house. No carpet, no carpet whatsoever, all new luxury vinyl plank there's beautiful tile in the kitchen that we're going to keep.
The home is not that old. It was recently just built a few years ago. It's got really, really high end granite countertops that we don't have to touch. So we're doing only flooring throughout. The square footage on this home is right around 1600 square feet or so. We're doing all new interior paint my lands! they did have some outlandish colors going on in this house. So we're doing only paint. And of course I don't pick out the paint, Carol Joy don't pick out the paint. We got Beth Garner, our interior designer. That's been with us ever since 2004. She picks out all the colors. The cabinets are really nice, high-end cabinets in this house. But the, it looked like the paint had faded. I mean, the canbinets almost looked like a little dingy yellow. I don't know what was going on.
So we're just painting those cabinets, white. And again the, I mean, those are the major items we're doing all new light fixtures, all new switch plates, new vent covers, we're painting the garage floor. We paint all of our garage floors and they look brand new. So again, it's gonna be a quick rehab, bought it for 266. Rehab is right around 20. In fact, it could end up being closer to 15. I don't think we're going to hit 20, but Murphy shows up in every house, right? The after repaired value, the ARD, the after repaired value on this house is $375,000. So let's run these numbers and see what it looks like. So our next numbers, let's just pretend that I hadn't bought this house yet. So let's go over what the maximum allowable offer would be on this house.
So remember you're using, we only use Mayo maximum level of offer when you are paying all cash for a house. So the maximum allowable offer to figure out what's the most you would pay for this house. You take the ARD the after repaired value. And when the ARD is over $300,000, we multiply times 80%. Now, when the ARD is under 300,000, we multiply times 70 percent, right? So we take 375,000, that's the after repaired value. And you know, our definition of after repaired value is this home is going to look brand new. We're going to have new landscaping upfront, absolutely beautiful. So you take 375,000 multiply that time 80% because the ARD the 375 is higher than 300, that equals $300,000. Now we're figuring up what would be our maximum offer on this house. Then we take the 300,000 and you subtract the repairs.
So our repairs on the high end are going to be around 20. So we subtract 20 away from the previous number. Now, the maximum allowable offer is $280,000, but we're not finished. I never offer Mayo. Does Murphy live in every house? Yes, Murphy lives in every house. Sometimes Murphy's cousins, grandparents show up. And you know what I'm talking about, I'm talking about the unexpected repairs that you didn't count on. So I was buffering at least an additional $10,000 on any house that I'm buying to make sure I'm covering the unexpected. Then that actually gives me what's the most I would pay. So the most I would pay would be 270,000. Remember that Mayo maximum level offer was 280,000, less than additional 10 to 70 would be the most I'd pay. And how much did I pay? 266,000. So I actually paid $4,000 less than what my formula calls for.
So I actually have $14,000 built in here in this deal for the unexpected. So there's the numbers. So now let's talk, talk about how so that's right. $89,000 is the profit. And of course, do you have to subtract carrying costs, which are private lender, you know, interest, insurance taxes, I don't know, number to put in exactly procuring cost. Cause I don't know exactly how long I'm going to have this house, but my exit strategy is I'm going to put her in the multiple listing service and sell it like that. In this hot market. My lands inventory is so, so scarce, I mean, I just put a house on the market last week, over here in Beaufort, small house, 1,350 square feet. I put it in the market for 239,900 in two hours. We had four showings already scheduled, lined up. And the offer that I got was actually more than the list price.
In fact, I never had an offer like this. They said, I you'll accepted our offer. When we get the home inspection done anything that costs less than a thousand dollars, we want to ask you to fix it or do anything. Well, they shouldn't find much of anything cause it was a complete rehab. Back to Fern Court. How did I find deal? Using my Foreclosure System, using my Foreclosure System? What in the world is that? my Foreclosure System is a system that Carol Joy and I started putting together back in 2004 where we track every foreclosure open file in our target market, here in Eastern North Carolina. Well, this we were tracking, this is one of the open files. And so the people there was another bid. So the bank had an opening bid, then somebody else bid and they won the bid. Well, here in North Carolina, we have this thing called the 10 day upset period.
And so that means anybody within 10 calendar days can come in, upset the bid by at least 5%. And that just goes on to infinity until everybody stops bidding. So I upset their bid and I'm sure it made them upset, right? So anyway, I upset their bid and they did not come back and upset my bid. So we were the winning bidder on this house. So again, using my Foreclosure System, we were able to track all that and not miss out on any opportunities. Now, how did I fund this deal? Private money. You see you may be familiar with buying a house subject to the existing note. Couldn't buy this house subject to the existing note because it was vacant. It's already gone through the foreclosure process. And the only way that you can buy the foreclosures like this is you've got to have all the cash lined up, ready to buy.
So if I didn't have private money sitting on the shelf ready to go from one of my private lenders, I would have missed out on this deal. So I had to close within 10 days. And of course that's more than plenty of time when you're working in this world of private money to get your deal funded. So lessons learned had to have private money ready to go. I used my tracking system, the Foreclosure System, not to miss out on this deal. And then when it comes to the rehab, if you're going to be doing any rehabbing, you've got to have a relationship with fantastic general contractor or general contractors. Now in mine Carol Joy's world, we work with general contractors and we have our own crews as well that have been working with us. This particular house is being rehabbed by one of our crews.
But if you're just starting out, don't get your own crew. You want to do business with a general contractor. That's proven to have an excellent reputation. So there you have it folks, 108 Fern Court, $89,000, profit, less the carrying costs. And I see we've had a question come in here from, hello, Jesse. So glad to have you here on the show. Jesse says, have you ever used Fund and Grow zero interest business credit cards and Jesse, Yes. A long time ago. In fact, I know the founder of that company, Mike Banks, he and I are in a Mastermind group together. And they really are a good company. They're a good company to work with. One downside is, is there is going to be a limit to the amount of money Jessie that you can get. Here in this world of Private Money, there is no limit to the number of lenders you can do business with.
There's no limit to the amount of money that you can borrow. So, excellent question, Jesse. Thank you for chiming in there. There you have it folks. 108 Fern Court, $89,000, profit, less carrying costs. And again, I'd love for you all to come join me a couple of times a month in the Private Money Academy membership. And you can get right on right where they are right now. Since we're wrapping up this show right now to www.JayConner.com/Trial. You all have a good one. I'm Jay Conner, the Private Money Authority wishing you all the best and here's to taking your Real Estate Investing business to the next level. I'll see you on the next Zoom coaching call for Private Money Academy membership attendees. See you there on the inside.
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