Wholesaling to a flipper compared to a landlord

[Mike Schorah]

What’s the difference between wholesaling to a flipper compared to landlord?

Are more wholesale deals done with landlord end buyers opposed to flipper end buyers? 

I ask this because I know that rehab costs are cheaper with rentals. Ex: A flip rehab might be $65k where for the same property a BRRRR rehab would only be $40k. This extra $25k would therefore allow your offer to be more competitive.

This leads me to guess that more deals are done with landlord end buyers. Am I right or wrong? 

And how would you decide to price your wholesale offer either way?

[Jim Pellerin]

Quote from @Mike Schorah:

What’s the difference between wholesaling to a flipper compared to landlord?

Are more wholesale deals done with landlord end buyers opposed to flipper end buyers? 

I ask this because I know that rehab costs are cheaper with rentals. Ex: A flip rehab might be $65k where for the same property a BRRRR rehab would only be $40k. This extra $25k would therefore allow your offer to be more competitive.

This leads me to guess that more deals are done with landlord end buyers. Am I right or wrong? 

And how would you decide to price your wholesale offer either way?

My experience is there are a lot more flippers than buy and hold investors.

The 2 big differences are:

1. Purchase price can be higher for a buy and hold because they dont have any selling expensives. So, instead of using the 70% rule, I use the 80% rule to calculate the MAO.

2. The prices of buy and hold properties are lower because the investor is looking for cash flow instead of equity. Most buy and hold investors are looking for a 10 cap from their investments. And the cap rate is calculated using price + reno costs for their calculations.