Please Analyze This Wholesale Deal

[Brandi Williams]

3 bedroom 2 bathroom split level single family home
Wood floors, carpet in bedrooms, Fenced in backyard with pool, corner lot in established neighborhood.

Repairs: Carpet cleaning, possible touch up paint, replace 5 to 6 windows, clean and drain pool, replace fence or just repair broken areas of it

We are thinking 5k to 7k in repairs

Zestimate: $123,500
Eppraisal: $111, 546

ARV: $100,000 (us being modest, distressed homes in the area sold for $70k to 80k)

Our Purchase Price: $50,000

Asking Price: $65,000 (leaving room for negotiation of course)

Is this something you as an investor would buy? If so, why? If not, why?

Thank you!

[Joel Owens]

Each deal is analyzed and evaluated based on it's own merits. To make a blanket statement and say YES and investor would do this deal doesn't make sense.

This is the same rational when people equate foreclosures to DEALS.A deal can be in the form of many different types of properties or seller motivations.

Also depends if you want to wholesale it,whole tail it,or sell retail,or keep it in your portfolio as a rental.

[Account Closed]

landlors already have enough liability to worry about...what landlord wants a pool in the backyard???

[Jon Holdman]

What real evidence do you have for the ARV? You've provided nothing. I have a house right now that has a zillow estimate of $200K. I'm selling, and have it under contract for $172.5K with $7500 in concessions.

If you have it under contact at $50K, take $55K and do the next deal.

[James Hiddle]

Don't rely on online comps get actual comps from a Realtor and determine the ARV that way because no investor in their right mind would purchase a property based on Zillow or any other online comp service.

[Will Barnard]

On top of all that has been said, hoping for a $15k payday on a wholesale deal for a sub-$100k deal is super optomistic!

As suggested, a $5k profit is more reasonable and $55k with an exit of $95k with 7k rehab is a presentable deal.

[Account Closed]

will, i don't think you have a sale price of 95 with the repairs she mentioned, which were "Carpet cleaning, possible touch up paint, replace 5 to 6 windows, clean and drain pool, replace fence or just repair broken areas of it." to me, that sounds like repairs just to get rent ready. to flip the house at 95k, i would think the house would need more work. a slit level means it's probably 20 or 30 years old, so are the kitchen and baths updated? how about roof and mechanicals? i'm thikning the repairs she mentioned where for a rental, and i wouldn't wanna be all in on a rental for 70k. brandi, are these repairs you menioned good enough to flip, or is that more geared towards a rental? if so, what is the market rent? where is this property anyways?

[Will Barnard]

You could very well be right Bryan, we were not supplied enough details so rather than speculate, I just dropped teh basic numbers on a retail flip scenario. As you stated, that could easily be a $20k makeready rather than $7k.

Note: Don't be one that makes the common mistake that a pool can be drained and cleaned and work like new. Often times, a neglected pool needs mechanical repairs and often, a strip and re-plaster.

[Matt Rosen]

I often hear wholesalers tell me all the time how great their deal is and they base most of the conclusion on Zillows value. Major red flag...much more due dilligence is needed to say the least.

My suggestion is next time you need someone to analyze a deal, have credible sources that support your math. If these are real numbers, I agree with Will and Jon and take a $5k profit. With a pool, I would even say take a $3k profit. That pool sounds like an issue to me.

[Sharad M.]

Brandi,

Sometimes, greed is good, but not with this deal. From your profile, it looks like you have completed one deal prior to this, so if you can complete with deal with around $2-3k of profit, I would consider it a good pay day.

With this deal completed you will come out more experienced and with extra $2-3k in your pocket, which is great considering most people have to pay for an education.

Good luck and keep us updated.

[Brandi Williams]

Thank you all for your replies. To answer the questions about the ARV on the home the realtor stated the After Repair Value would be $105,000. That's why I put the $100,000 as us being modest. We also have the Comparitive Market Analysis that backs the ARV.

I also put 65k as our asking price just to get the ball rolling we may very well bring it down to 60k, but all of the prices are "or best offer" which is why we give ourselves more wiggle room with what we will take. We do not expect to make a 15k profit although it would be nice.

Bryan you make a good point about the pool in the backyard, I did not think about the liability that comes with that. We were going to make more to the fix and flippers but if the buyer comes in looking to rent that is something to consider. The repairs mentioned are all that is necessary to fix and flip this property. The property is in Greensboro, NC.

[Account Closed]

good answers there brandi....are you telling me that the house only needs slight touch up paint to flip?? i've never seen a house that didn't need a whole interior paint job (in my limited experience, admittedly) to sell to a retail buyer. again, how are the mechanicals? how old is this home? is the roof in good condition? have the plumbing and electric been updated? what about the hvac? these are key items that need to be addressed when flipping a house that you haven't mentioned yet.

[Brandi Williams]

The house was recently updated from what we saw. It was built in 1964, Roof looks in tact but I'm no expert in that area. From our walkthrough it is literally move in ready, the paint isnt really necessary besides the normal marks from moving furniture in and out. The main repairs are the windows and getting the carpet cleaned. HVAC was up to date and the power in the home as well.

It honestly looks like the owners were in a rush to get out, but left everything in good shape. I would move in myself if I wasnt planning on moving to Charlotte soon.

[Account Closed]

good choice...charlotte rocks!!! the last thing i would mention is don't trust a realtor...make him/her show you a few close, very recent (last 3 months preferrably) comps that are similary style, same beds, baths, etc. if they sold for 95-105k, then sounds like you have a deal!! good luck.

btw, just noticed you said the owners left quickly....was this a foreclosure? did you get it off the MLS??? the most annoying thing to me is when i see a property on the MLS that a wholesaler tries to turn for a profit, without doing anything or adding any sort of value. if you got this on the MLS, i'd advise you to do the work yourself since there's not much to be done. then you could get that 15k profit you want.

[Brandi Williams]

Thanks Bryan and everyone else that chimed in about this deal. I really do appreciate it!

[Joel Owens]

Hey don't trust a REALTOR....I resemble that remark! LOL Just kidding.

It's true that some brokers/agents will make something appear rosy to get you to buy.

Even if you are just selling off the property for a quick 5k it would be wise to have a folder to give prospective purchasers about the property.

With the pool does it dominate the yard? Is it in the middle,off to the side,etc.

The corner lot is it fenced?? If not buyers will worry about people cutting through their yards. Is their a power pole close by? That can also make buyers nervous.

Corner lots also depending on if in a subdivision or side street can be nosy with stop and go traffic.

You have to make sure the external features are just as appealing as the external.

When I would drive around with real estate developers for site acquisition would would put every location through a process.

We would start out with say about 10 and then on the map have a checklist of positives and negatives.When we wittled down the list we got down to around 3 properties and they purchased 1 to 2.

[Brandi Williams]

I agree that some realtors will say the sky is purple if they have you on the hook, but our guy is very straightforward and honest about his numbers.

The pool does dominate the backyard which concerns me a little. The home is fenced in and from what I remember there was no power pole on the corner.