Wholesaling deals that makes since

[Carla M Richardson]

Hello all: I'm relatively new to real estate and am currently doing wholesaling. 

I already have a potential seller and I'm already confused about what to do next:

1. What is the best way to figure the ARV? Or is this extremely necessary during initial negotiation? If not, when would this become of importance?

2. How would I negotiate a deal that "makes sense"? What does it mean for it to "make sense"? Is it that a mixture of  making sure it's selling at a reasonable price to get a lot of interest as well as being profitable for me doable for the buyer?

3. If I talk to a realtor, would I have to pay them too?

4. I was told not to worry too much about the repair fees when deciding the price initially, as that would be better accessed by the buyer. I'm wondering if then a good strategy would be to have a serious buyer put a down payment, come see the house and get it appraised or do their own assessment and then adjust the selling price afterwards.

I just need some clarity before I start attempting to build my on this deal and future ones.

Any and all responses are welcomed.

Also, I am interested in a mentorship so please feel free to contact me if interested.

Thanks in advance.

Carla richardson

[Chris K.]

@Carla M Richardson

As an attorney in PA, I have not seen anything in the law that would make me comfortable saying that "wholesaling is legal in PA". It's at best a gray area. 

In any event, to answer your other questions:

• ARV: for single-family homes, you'll need to rely on comps. For two to four units, you are technically "suppose to" rely on GRM, but in my experience it's more of a mix between comps and income/cap-rate valuation. How to do it is a complicated question that's hard to answer just on BP. But there are a lot of articles about it. You can even take courses if you wish.

• Deals that make sense: from whose perspective? From the wholesaler's perspective, you are basically trying to find a deal that is beneficial for you, the seller, and the buyer. That's the goal but those deals are very hard to come by. As such, I often see at least one out of the three getting screwed over in most wholesale transactions. 

• Realtor: depends on what you mean. If they are the seller's agent, it will come out of the closing cost.  

• Repair Costs: one of the "value" you can provide to the buyer is having access to good contractors and material vendors in the area. So if you want to make a living doing wholesales, I wouldn't ignore it.

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.