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Updated over 5 years ago on . Most recent reply

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Ashley Marie Lucas
  • Piscataway, NJ
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New to Wholesaling Any Advice

Ashley Marie Lucas
  • Piscataway, NJ
Posted

Hi, 

      My name is Ashley I am new to real estate and I am looking into wholesaling. Does anyone have any tips or pointers for me as far as looking for good homes and the price range of the resale value I should be working within. 

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Jerry Puckett
  • Wholesaler
  • Fort Worth, TX
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Jerry Puckett
  • Wholesaler
  • Fort Worth, TX
Replied

Hey @Ashley Marie Lucas,

Can you tell me what that means to you...."looking for good homes"..? The best ones are the ones your buyers are looking for, and the worst are the ones no one wants (and for the most part, the ONLY one NO ONE wants is the one that is overpriced).

I promise that's not meant to be snarky....the tip is to find out what buyers want. One of the best ways to do that is to look up where investors have been buying near to you. You can do this with certain data providers without spending a dime.

As to the resale value, if you are wholesaling, then use wholesale math on your potential offers. Here's a good starting point:

ARV X 70% - Repair Cost - your profit = MAO

It is never that neat and tidy though. Negotiate the best deal you can and then offer the contract to your buyers at a price that makes sense. If you leave no room for profit, if you are greedy in your fee, if you fudge the numbers to make it work, or if you didn't negotiate a good discount to begin with, it WILL NOT MAKE SENSE and you will have no "DEAL".

If you are able to negotiate a price that leaves enough room for your end buyer to make a profit worthy of the risk they are taking, your fee is the amount between the price negotiated and the amount the buyer is willing to pay. So your "resale value" is entirely dependent on your contract price relative to the conservative estimate of profit from your buyers.

Knowing what the buyers want, their level of comfort with a rehab, the amount of risk they are willing to take and their end goals are all very important matters and my second tip to you is find those things out.

Hope that helps!

  • Jerry Puckett
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    Ashley Marie Lucas
    • Piscataway, NJ
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    Ashley Marie Lucas
    • Piscataway, NJ
    Replied

    Thank you Jerry. That was very informative and helpful. I appreciate your quick response. 

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