Wholesalers are maddening - Be smart, people!

[Ben Leybovich]

So - I've been in Phoenix MSA for about 7 months now. I feel like I have a grasp on the market. My wife, @Patrisha Leybovich is an agent with Keller here, and she is pretty sharp.

Wholesalers are absolutely ridiculous here. Patrisha gets these emails practically on a daily basis, and the title is always "Phenomenal off-market deal"...or something like that. 

This last joker proceed to explain that the wholesale price is $225,000. The retail is $299,000. Looking at the pics, just to put some lipstick on it would take $25,000. And looking at the MLS it's worth $275,000 in great condition at best.

There are lots of newbies here, so for your benefit:

1. Determine ARV - this has to be step 1.

2. Build-in margin for error.

3. Subtract from this all of your holding/transnational/rehab costs - this is step 2.

4. Subtract your intended delta

5. This is your offer

The main point is - DO NOT START AT THE BOTTOM. START AT THE TOP AND SUBTRACT YOUR WAY TO THE BOTTOM.

And please be aware that 99.9% of wholesalers are worse than gurus. At least, you can only lose what you put in with gurus. Getting into a bad deal from an unscrupulous can end up being a gift that never stops on giving... If they are stupid enough to try playing a realtor with the last name Leybovich for a sucker, God knows what they do with a newbie investor.

Good Luck!