Skip to content
×
Try PRO Free Today!
BiggerPockets Pro offers you a comprehensive suite of tools and resources
Market and Deal Finder Tools
Deal Analysis Calculators
Property Management Software
Exclusive discounts to Home Depot, RentRedi, and more
$0
7 days free
$828/yr or $69/mo when billed monthly.
$390/yr or $32.5/mo when billed annually.
7 days free. Cancel anytime.
Already a Pro Member? Sign in here

Join Over 3 Million Real Estate Investors

Create a free BiggerPockets account to comment, participate, and connect with over 3 million real estate investors.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
The community here is like my own little personal real estate army that I can depend upon to help me through ANY problems I come across.
Rehabbing & House Flipping
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated about 7 years ago on . Most recent reply

User Stats

472
Posts
145
Votes
Cody Evans
  • Wholesaler
  • Fairfield, CA
145
Votes |
472
Posts

Wholesaling To Flipper: How To Make An Offer

Cody Evans
  • Wholesaler
  • Fairfield, CA
Posted

Hi BP,

I am scrambling right now to make the right offer in the right way by tomorrow noon. I am in the nor cal market and the house has ARV 360 so I figure my max offer allowable is 360-(55k repairs)-(my 10k wholesale fee)-(60k for holding costs and flipper profit) = MOA of 235k

I figure my intitial offer should be around 215k. 

What do you guys think? Even if you dont know the market some advice would be better than none and guesstimates are better than nothing. Is this too low for a seller to accept or too high for a flipper to think it is a good deal?

My negotiation strategy is give them my 215k lowball offer and then if they object ask how close they can come to that number? Then to whatever they say I will reply with "is that the best you can do?". then to whatever they say I reply "So if I pay you all cash and can close quickly how much lower can you go?" 

Then I figure if they arent anywhere near 235 by that point I say "I want to put this money in your pocket but it has to work for both of us. How much lower can you go? I'll have to get on the phone with my partner because we set a certain number I could not go higher than."  

If you can help with any aspect of this problem please feel free.

Most Popular Reply

User Stats

42,664
Posts
62,806
Votes
Jay Hinrichs
#1 All Forums Contributor
  • Lender
  • Lake Oswego OR Summerlin, NV
62,806
Votes |
42,664
Posts
Jay Hinrichs
#1 All Forums Contributor
  • Lender
  • Lake Oswego OR Summerlin, NV
Replied

cody lets just do simple math.  of how a flipper would look at this deal.

ARV 350k Minus 10% for selling costs which includes the realtor fee tax's insurance utls etc while holding it.

now most flippers ( myself included) are going to borrow money some where so lets be generous and say 2 points and 10%  plus closing costs.. so lets say they borrow 200k for a round number  that 4k in points 10k in interest so that's 14k for financing lets just say 15k.

Now lets say your SOW is 55 in your mind lets say in reality its probably 65k. 

So we have 65k rehab  your fee of 10k  35k resale cost and 15k holding costs.  about 125k to get it done.

350 - 125 = 225k  and most folks are going to want to make 15% on gross  so right at 55k HOPEFULLY although now a days you might find someone that would take a swing at this for 25 to 30k but most won't.  225k - 55k  and the flipper will want to pay 170k ish for it...

business profile image
JLH Capital Partners

Loading replies...