1st Wholesale deal in North Philadelphia-Help!

[Armando Ramirez]

Hello everyone,

To give a brief intro, my name is Armando. I've been a broker in NYC and am now directing my efforts to start investing in Philadelphia. 

In looking for deals, word has gotten around to my family and their friends and some people have said they have a property that they were thinking about selling. One was serious enough to give me a price and say she would like to close within the next 30-60 days if possible. 

She needs $38,000, but would not take less than $35,000. Now I have never acted as a wholesaler. So since she's a friend of a friend of a family friend (you know how that goes) I'm trying to get her the highest possible price, while looking to collect an assignment fee of $2500-1500. So I'm advertising the asking price at $40,000.

The house is in fair condition. It's livable, currently owner-occupied. I have not gotten any contractor estimates since this just fell in my lap today.

The property is a 2 bedroom, 1.5 bath on North Reese Street, off Glenwood Avenue. Now I love Philly as much as I love New York. And I grew up visiting this area and several different family members in the area. But for those who don't know or are interested in investing in Philadelphia from a distance, this area is appropriately named "the Badlands". To this day there are open-air, drive thru drug deals. It's as if there has been no change, and according to current residents, it has even gotten worse through the years. So I know this is going to be an interesting, challenging deal. But I'm from pre-hipster, pre-bike lane Harlem, so whatever.

Nevertheless, this is still my FIRST wholesale deal so I would really appreciate some guidance on the following:

1-What is a typical assignment fee at this price point? As a broker, when I'm going for a listing, I start at asking for a 6% broker fee. So in this case, if I can get the seller $38,000, a $2000 assignment is approximately 5.2%. Is that in-line or too much?

2-Comps in Philly? First off, City assessed value for this property is $46,900, property taxes $682. This area has some ridiculous sale prices, like under $5000 so it makes it difficult. I like property shark because it groups the properties by square feet and sale price greater than $25,000. So for "Residential Medium" (house is 810 sq ft) properties sold in the past 18 months for more than $25,000 in the 19140 zip code, Property Shark finds 184 properties and the median sale price was $40,000 (coincidence?). The median price per square foot was $32 which would value the house at $26,000. What site/tools/statistics do all of you other Philly investors/wholesalers use for comps?

3-Pricing? Again, I'm trying to act like a wholesaler, but I know I'm thinking like an agent representing a seller. I'm trying to get her the highest possible price while still trying to make this deal worth the time and effort for me which would be no less than $1500-1000. I'm expecting some negotiation depending on interest and their rehab estimates. But I know that 2 bedrooms in the area are renting for $500-700 in worse condition than this house, and the main buyer interest will most likely be landlords. So a landlord/buyer can put a tenant in with minor work, less than $5000. So am I using a good pricing strategy to expect some negotiation, get the seller a price she will say yes to and not erode my fee? 

4-Advertising? I'm keeping a spartan budget therefore not looking to pay for any marketing because I honestly have never had to in New York. Is this the same for Philly wholesalers? I have posted ads on Craigslist, and Postlets which feeds to the usual suspect sites which are all owned by Zillow anyway. Any other sites/resources anyone can recommend for marketing this deal?

5-Title Company?  I'm running this deal so I need a wholesaler (and rookie) friendly title company....any recommendations, Philadelphians?

6-Contract? Lastly but most importantly, I'm going to see her Monday again to sign the contract. 

I have some sample purchase contracts which allow assignment that I have downloaded over time while researching the wholesaler niche. But I would really love to see what other Philadelphia wholesalers use. 

If anyone would be kind enough and willing to connect with me so I can get a copy of the purchase contract and the agreement to assign that active wholesalers are using, I would be happy to repay you with a Philly cheese steak, a bottle of wine, box of cigars, Eagles tickets, etc. you name it!

I would really appreciate some guidance and look forward to connecting with more Philly players!

Thank you