info about wholesaling in Virginia Beach

[GK Hughes]

hello, I'm a beginner real estate investor who is looking to get into wholesaling until I've made enough money to move up into investing in flipping properties.  My wife and I have been researching wholesaling and have a few questions such as,,,

....Once we've found a property in a money making situation and intend to market it to an investor, how do we ensure the investor doesn't go around us to buy the property themselves?

.....what rates are normal for wholesalers to charge investors?

.....should we find the investors first, get their property criteria, and then look for the property that fits that criteria, or do our own evaluations and then find investors that like our selections, or a combination of both?

.....do we need a license?

Any help you can provide would be appreciated.  I'm excited and standing by for your answers!

[Thomas Fucci]

Two formulas:  

If the comps for a property tell you chances are the house will sell for $150,000.  

But you determine you need $35,000 in renovations.  

And you want to make $15,000 on the deal as a wholesaler 

And you want to factor in 3% for closing costs on your side. 

ARV x .80 – minus rehab costs – minus my wholesale fee x .97 = MAO

150000  ARV based on comps 
( 30000)  @ 80% or 20% Equity 
( 35,000) renovations 
( 15000) wholesaler fee
(   4500) closing
65,500  MOA  Max Offer to the Homeowner/seller   
15000  Wholesaler fee
80,500 is what you want to sell it to your buyer (hopefully more but possibly less)

This leaves the investor/buyer with 20% equity in the property, money to cover repairs and closing costs if needed.  If the wholesaler contracts directly from the homeowner who does not have or want an agent, then you are saving money off that $4500 closing.

If the investor negotiates you might find yourself walking away with less than 15,000. That's why it is so important to have good numbers on your repairs estimate sheet.   It's worth getting into a relationship with a contractor who is willing to come along and do some detailed work about kitchen bathroom, plumbing electrical, foundation, roof, etc, and a number to go along with each in exchange for hopefully getting the job or if not, a fee for the work done from you.   An investor who knows what he or she is doing will know if what needs to be done can be done with the number you are suggesting which is why the GC can be key for your negotiations.