How Does Riv Buys Properties Work?
Our As-Is Cash Offers Are Built on Your Home's After-Repair Value. Here's the Exact Math.
How much we offer for your house is the most important question on your mind right now. We get it. On this page, we walk through every variable that goes into your cash offer, and we show you the actual math behind the number.
First, we cover how we buy houses for cash in Georgia, start to finish. Then we share a real example of a cash offer we recently made to a Georgia homeowner. The same kind of homeowner you may be.
The Offer:
Our offers are based on the After Repaired Value of your house. This way we can make the highest fair offers for your house where we can walk away with our profits, and you with the cash you need.
Here is a breakdown of how the offer is generated.
[Your Offer] = [After Repair Value] - [Cost Of Repairs] - [Our Selling Costs] - [Our Minimum Profit]
This Is How We Calculate Our Cash Offers:
1
We Determine The After Repairs-Market Value Of Your House.
After-Repairs Value (ARV): simply means what your house would be worth if it were completely renovated based on current market standards, just like your favorite HGTV show. Your offer is based on this value.
2
We Calculate The Cost of Repairs
The cost of repairs plays a major role in how much we can offer when we buy your house. We conduct a comprehensive evaluation of all necessary repairs, not just cosmetic updates. From structural fixes to mechanical upgrades and code compliance, we assess everything required to make your house market-ready while keeping costs reasonable.
By factoring in these expenses, we ensure you receive a fair cash offer while allowing us to cover costs and maintain a sustainable business. Our goal is to create a win-win situation where you can sell your house fast, and we can buy your house with a smooth, straightforward process.
3
Evaluating Our Selling Costs
When we buy your house, we factor in the selling costs we’ll incur after making repairs. While you can sell your house fast without paying agent commissions or closing fees, we still have expenses when we resell the property.
To sell the house for top value, we list it with a realtor, which means we cover:
- Closing costs
- Real estate agent commissions
- Property taxes and holding costs
These costs are included in your cash offer to ensure we can buy your house at a fair price while covering the necessary expenses to resell. Our goal is to create a solution where you get a fast, straightforward sale, and we take care of the rest.
4
Factoring in Our Profits
Our profit margin is a necessary part of sustaining our business and continuing to buy houses. Just like any business, we need to cover essential costs such as purchasing houses, funding repairs, and compensating contractors.
That said, our goal is always to make fair, competitive offers while ensuring we can operate efficiently. We structure our offers so you can sell your house fast at the highest possible price, while allowing us to manage the costs of repairs, reselling, and business operations.
By maintaining a reasonable and transparent profit margin, we ensure long-term success for our company while continuing to provide homeowners with a reliable way to sell their houses for cash.
Simply put, it all boils down to this concept:
Your offer will be the market value of your house completely fixed up, minus all the costs associated with us bringing the house to its completely fixed-up condition, minus our profits (of course).
Get Your Offer Started
Today
Case Study on an Actual House Purchased by riv buys properties in atlanta
Here is a case study from a house we recently purchased and flipped in Atlanta. The property came to us as a total tear-down. Every system needed replacement, the structure required major work, and the rehab took nearly a full year to complete. We share the numbers because we show our math, not hide it.
1
Imagine for a moment that you have a house in complete disrepair, and therefore you can't sell it for much, (in fact, you probably wouldn't even be able to list it as banks will not loan against houses in severe disrepair).
2
Now, let's say that the house in its current condition is worth $100K (so the "as-is" value is $100,000), but let's say that if you were to put $150K into the house, you would be able to sell it for $380K. (Yes this is actually the same house.)
Sadly, you probably do not have the funds, time, or energy to manage a year of contractors, permits, and the stress that comes with a major rehab. We do. We absorb the capital risk, the year of holding costs, and the resale work.
3
Cash buyers like us could come in and offer you $100K for your house. For us, this works because, if your house is worth $100K and we offer you $100K and we put in $150K making the house worth $380K, plus we carry $35K in holding costs over the year (mortgage at $2,700 per month, plus property taxes, insurance, and utilities) and another $28K in agent commissions and closing costs at resale, means we then spend $313K and we made $380K netting us a profit of $67K.
You get cash for your house today without dealing with contractors, repairs, or a year of stress, we make our minimum profit for the work and risk we take on, and everyone walks away happy. The fine print here is that this situation doesn't always occur, but that is why you fill in the form, so we can see what options are available to you so you can still walk away with a win.
Let’s Crunch Those Numbers
- As-Is Value (what we paid): $100K
- ARV (After Repair Value): $380K
- COR (Cost of Repairs): $150K
- Our Selling + Holding Costs: $63K (closing costs, agent commissions at resale, property taxes, insurance, plus 12 months of mortgage at $2,700 per month)
- Our Profit (what we needed to make this year-long project viable): $67K
Your Offer
The Formula
[Our Offer] = [ARV] − [COR] − [Our Selling + Holding Costs] − [Our Profit]
Our Offer = $380K − $150K − $63K − $67K = $100K
Our Offer = $100K