Analysing deals for wholesale

[Davina M.]

Hello BP. I am super new to real estate investing and have chosen wholesaling as my niche to start while still working my full time job. I have been researching analysing deals so I can practice and start making offers. As I have been researching I have not seen anything on analysing deals for wholesaling. Am I missing something? I have only been seeing posts on fix and flips or duplexes or buy and holds etc. Are the formulas essentially the same or does it depend on what the buyer is trying to do with the property? Any insight on this would be great. Thanks.

[John Leavelle]

Howdy @Davina M.

There is tons of information on Wholesaling here on BP.

Let me give you a basic formula to use:

MAO = ARV - Flippers Profit - Repair Costs - Fixed Costs - Wholesaler Fee

MAO or Maximum Allowable Offer is the most you can offer to the Seller and still make a profit.

ARV is the After Repair Value the Flipper expects to sell the property for after the project is completed. It is important for you to understand how to determine the ARV.

Flippers Profit.  It is important to know what your clients what to achieve for profit.

Repair Costs.  You must learn how to estimate the Rehab costs. I strongly recommend you get J Scott's books on Flipping and Estimating Rehab costs.  You can buy them through the BP website.

Fixed Costs.  These are the expenses the Flipper will pay (including Holding costs, and Closing costs on both ends of the deal).

Wholesaler Fee.  How much do you expect to get paid!

Use the search bar here on the BP site and look for "The Ultimate Guide to Real Estate Wholesaling " by Brandon Turner.  It it provide a good overview on Wholesaling.

Hope this helps.