What’s my next step? Whole saler

[Cutter David]

Alright guys I need some guidence! Found a home with no mortgage. For sale by owner! No offers that I know of have been submitted. The market in southern Utah is a sellers market. Home needs a lot of touch ups built in the 80s. I would say its In a C Grade neighborhood. The average house in good shape is being sold for about 250,000 here. He’s asking 188k or best offer. I know that wholesaleing you pretty much low ball the owner on the offer but by how much? I think 30-40 thousand for rehab is needed. The House does come with huge lot in the back. I want to try to get this under contract but have no idea how to. Also don’t know what price I should offer. I feel like this could be my first wholesale but I need to act quick!

[Heath Ryans]

@Cutter David Most important thing im going to say in this whole entire post: 

The average house sell price does not matter

You need to find out what comps sell for. What do houses just like this one, # bedrooms, #bathrooms, sqft, and lot size sell for,fixed up, in the past 12 months max. The more recent the more accurate.

The if your going to make an offer: (ARV x 0.7) - Repairs - Your Profit = Offer Price

For this specific one based on your Average Sells price which you will never look at again:

250,000 x 0.7 - 40,000(repairs) - 5,000(your profit) = 130,000 (offer price)

The 0.7 is taking 70% of the ARV. This is roughly 15% accounting for the cost of doing business (ie interest on the money, closing costs, carrying costs, ect) and the other 15% will be investor profit. if your investors demand more profit for deals, you adjust accordingly by increasing the percentage.

Your going to hear "no" or much ruder variations of it a lot. That's fine. It just means your doing your math right.