How Much Will an Investor Pay for My House?
There is no reliable fixed percentage of market value that every investor will pay. A buyer usually estimates what the house could sell for after repairs, then subtracts the repair scope, purchase and resale costs, financing and holding expenses, contingency, and the return required for the risk. Different plans and capital costs can produce very different offers on the same house.
That number’s going to depend on a few things that vary deal by deal, and those are worth understanding before you start taking calls.
I’ve been buying houses in Southern California since 2008, and before that I spent seven years as a certified residential appraiser, starting in 2003. That’s kind of where my read on this comes from, both sides of the valuation.
I’m also one of those cash investors, I have a direct financial interest in this, and I want to say that upfront.
What Goes Into the Number
A Zillow estimate or a neighbor’s sale is not enough to calculate an investor offer. The buyer needs nearby closed sales, the subject property’s actual condition, and a complete project budget.
The ARV Formula
The calculation starts with what the house would sell for fully updated and ready for a traditional buyer, then works backward based on what the repairs are actually going to cost.
A transparent version of the calculation is: expected resale value minus repairs, purchase and resale costs, financing and holding costs, contingency, and required return. Every input should be shown or explained instead of hidden inside a universal multiplier.
Holding Costs and Margin
The spread between the repaired value and purchase price has to cover more than profit. It can include escrow and title charges, financing, insurance, utilities, property taxes, permits, project management, resale expenses, repair overruns, and market risk before the buyer earns a return.
Sellers sometimes look surprised when a house needing $80,000 in work gets a lower offer than one needing $20,000, even when the neighborhoods are comparable, and the reason is the repair number really does run directly through the math.
Running the Formula Yourself
Some investors use a percentage shortcut as an initial screening tool, but it is not a valuation standard and it does not work in every market. A useful comparison itemizes the assumptions so you can see whether the offer reflects the property or simply protects an unusually wide margin.
| Illustrative $500,000 Project | Amount |
|---|---|
| Expected resale value after repairs | $500,000 |
| Repairs | -$60,000 |
| Purchase, resale, holding, and financing costs | -$55,000 |
| Contingency for unknowns | -$15,000 |
| Required return for the project and risk | -$60,000 |
| Illustrative maximum purchase price | $310,000 |
This example is not a quote, valuation, or promise. Replace every line with the buyer’s actual assumptions. A light renovation with a short timeline may support a higher purchase price, while structural work, uncertain permits, expensive financing, or a slow resale timeline can push it lower.
iBuyers Use a Different Model
iBuyers use a different model that relies heavily on automated pricing and standardized property criteria. Their fees, repair deductions, eligibility rules, and local availability can change, so compare the current written net rather than assuming the headline offer is closer to market value.
Most iBuyer programs have a fairly narrow eligibility range and won’t touch properties with significant deferred maintenance or title complications. Sellers who come to me after an iBuyer decline are usually comparing two offers that were built on completely different assumptions.
A Deal That Showed Both Sides
58th Place, Los Angeles
A seller came to me in early 2022 on a house at 58th Pl in Los Angeles.
She was weighing whether to fix the property up and list it or take a cash offer, and she wasn’t sure what it was actually worth or how long a traditional sale would take.
We walked through the repair scope together and gave her a number she could compare against what a listing might get her.
We closed at $695,000 in February 2022 and she was able to move on without taking on a renovation she wasn’t sure she wanted to manage.
That deal is a pretty common version of how the weighing plays out, the seller had a real option on both sides and the cash close was about certainty more than the highest possible number, and most of the calls I get run pretty close to that same framing.
Why Offers Vary Between Buyers
Offers can vary substantially because buyers may use different repair scopes, financing costs, resale timelines, exit strategies, and required returns. That is why one offer does not establish the property’s cash-buyer market.
Olmsted Avenue, Los Angeles
We closed on a property on Olmsted Ave in Los Angeles in April 2021 at $850,000. It had been listed at $1.15M with an agent and buyer interest ran into the $900s, but the seller came down because she wanted a close date she could count on, and the repair scope on that house wasn’t small.
What Moves the Number Up or Down
What the Walkthrough Reveals
I’ve made offers on houses where the photos made it look like a teardown and the walk-through came back mostly paint and flooring, and those conversations go differently than the ones where you open a wall and find something that changes the whole estimate.
What Sellers Can Do Before the Walkthrough
A few things that consistently affect the offer: accessible utilities. If the water and power aren’t on during the walkthrough, an investor is estimating conditions they can’t verify, and that uncertainty goes into the repair number. A house where every room is accessible and the utilities are live lets the buyer price the work more precisely, and that precision tends to come back as a tighter offer rather than a wider one built around unknowns.
If you have records for recent work, permits pulled for a roof or HVAC, receipts from a contractor, those documents matter in the walkthrough conversation. An investor who can verify that the roof is four years old prices it differently than one who’s looking at the same roof without any documentation and has to assume worst case. I’ve had sellers hand me a folder of receipts at the door and watched that straightforwardly change where the offer landed.
On deals where I know there are multiple buyers looking, the offers tend to come in higher than on properties where the seller is talking to one buyer at a time. Having two or three buyers walk the same week isn’t always practical, but on properties that are genuinely attractive to investors, it’s worth the coordination.
Seller Situation
On deals where the seller has an estate to close or an overlapping purchase they’re trying to coordinate, the conversation starts in a different place, and buyers who’ve been around long enough pick that up pretty quickly.
Competitive bidding can improve an offer, but there is no dependable percentage increase. If the property is likely to attract investors, schedule two or three walkthroughs in the same week and require each buyer to put the price, deposit, contingencies, closing date, and proof of funds in writing.
What Sellers Actually Net
Sellers ask me all the time what the comparison looks like, and the conversation usually starts getting interesting once we actually put both paths on paper instead of comparing headline numbers.
For the listing path, ask a licensed agent for a written net sheet using a realistic sale price. A complete estimate of seller costs in California should include negotiated compensation, preparation, concessions, escrow and title charges, and carrying time.
On a house that needs significant work, a lot of that investor discount is just repairs the seller wasn’t going to pay for anyway, and the sellers who actually run both sets of numbers tend to walk away from that conversation with a pretty different read on the gap.
Getting a Real Number
Most of my calls start with someone wanting a number before I’ve been in the house, and I’ll put a range out there, but I always let them know it’s going to shift once I’ve actually walked it.
Of the roughest-looking houses I’ve walked into, a lot of them came back lighter on work than the photos suggested, and the repair estimate ended up much more manageable than the exterior made it look.
Get two or three written cash offers, ask for proof of funds, and compare the contracts line by line. Look at the deposit, inspection and cancellation rights, assignability, closing costs, title requirements, and whether the buyer can change the price after the walkthrough. Compare those offers with a written net sheet from a licensed local agent.
Sellers usually get a clearer answer after putting their own numbers into an agent vs. investor comparison.
How Quickly Can You Actually Close
On a cash close, most of the deals we’ve done go from accepted offer to funded in 3 to 5 weeks, and the title company is doing most of the work during that window.
Where we’ve seen closings stretch past the original date, it’s usually been something the title officer found, a lien that needed to be cleared or a signature issue on an older deed, and they work through most of that inside escrow without the close date moving.
Sellers who choose cash usually ask what happens between the signed contract and the funded wire. We have seen the biggest timing differences in how long a cash closing takes when title has a lien or another payoff issue.
Getting the Right Help
On any deal where someone’s seriously considering both paths, I’ll tell them to talk to a licensed agent as well and get a real read on what the listing timeline looks like for their specific property.
We’ve watched enough sellers go through a frustrating experience with an operation that doesn’t actually close the way it says it will. Most problems show up before signing if the seller checks the warning signs of a we-buy-houses scam against the buyer’s proof of funds and contract terms.
How Much Will an Investor Pay: Common Questions
What percentage of market value do investors offer?
There is no reliable universal percentage. A buyer usually works backward from an expected resale value and subtracts repairs, transaction and holding costs, financing, contingency, and required return. Ask the buyer to explain those inputs and compare several written offers.
Why do offers vary so much between investors?
The spread traces back to what each buyer plans to do with the property. A light cosmetic renovation, long-term rental, owner-occupied purchase, and heavy resale project can support different prices because their costs, timelines, financing, and required returns differ.
How quickly can an investor close?
Most of our cash closes run 3 to 5 weeks from accepted offer to funded, with the title company doing most of the work inside that window. When a closing stretches past the original date, it’s usually a lien or an older signature issue the title officer found, and most of that clears inside escrow without the date moving.
We buy houses throughout Southern California, and if your property is there, we’re happy to walk through the math at no obligation.
You can reach us at (951) 331-3844.
Doug Van Soest spent seven years as a certified residential appraiser starting in 2003 before co-founding SoCal Home Buyers with his wife Andrea Van Soest, CA DRE #01505854. Together they have closed over 400 transactions across Southern California.
