Wholesaling running numbers

[Jordan Matanane]

Hi, my question is, when running your numbers other then the 70% rule what are the actual percentages? I’m mostly trying to figure this out for my area in Washington state, Pierce county and king county. I want to make sure when finding deals I am running them correctly. I stayed up late last night trying to figure this out. So far I got.

Arv example $400,000        4mo. Flip
Buying cost - 3% of arv
cost of money 3% ? Not sure

Holding cost 1.5% of arv
monthly hard money cost,
utilities, tax/insurance, maintenance

Selling cost - 6.5% of Arv Flat fee broker and buyers agent

Any feedback would be greatly appreciated, if you’re in a different market, would love to know how you guys are doing it. Thanks in advance. 

[Jordan Matanane]

Quote from @Scott E.:

You're asking the right question Jordan, but you're looking at it wrong.

Ignore the 70% rule. And throw out all of these other percentages that you have lined up.

To be a good wholesaler, you need to learn how to actually underwrite your deals. No real estate developers or house flippers in the real world are running numbers based off of arbitrary percentages. They are running real numbers on a deal by deal basis.

Your underwriting should look more like this. Same idea, but get rid of the percentages and apply real numbers based on the deal itself:

ARV: $400,000

-REHAB ESTIMATE: $80,000

-COST OF MONEY: $15,000

-OTHER HOLDING COSTS (utilities, taxes, insurance, landscaping, etc): $4,000

-STAGING: $5,000

-SELLING COSTS: $20,000

-PROFIT: $40,000

=OFFER: $236,000

 Thank you Scott, I will try and apply this concept. I guess I just wanted to see the break down of each line and use that as a blueprint. Thank you.