What is the market rate % of ARV for making a wholesale offer?

[Andrew Gordon]

I'm using the flat percentage of ARV method to come up with an offer price for a property which just multiplies the ARV by a certain %. However, certain markets have different rates. Folks who use this method start with 70% and adjust for the area - if it's a desirable, high appreciation area, people are less likely to sell and flippers are more likely to pay more, so you might multiply the ARV by 75%. If it's the opposite, a low appreciation area with more crime, maybe offer 65% of the ARV. And so on depending on how desirable / undesirable the area is.

So my question is, for anyone in Denver using this method, what % rate are you using? I was guessing 72% since it's a higher appreciation area.

[Adam Macias]

Quote from @Andrew Gordon:

I'm using the flat percentage of ARV method to come up with an offer price for a property which just multiplies the ARV by a certain %. However, certain markets have different rates. Folks who use this method start with 70% and adjust for the area - if it's a desirable, high appreciation area, people are less likely to sell and flippers are more likely to pay more, so you might multiply the ARV by 75%. If it's the opposite, a low appreciation area with more crime, maybe offer 65% of the ARV. And so on depending on how desirable / undesirable the area is.

So my question is, for anyone in Denver using this method, what % rate are you using? I was guessing 72% since it's a higher appreciation area.

Using a 70% of ARV formula works, I mean depending on the repairs it's still a property at a discount. The biggest thing to focus on is what your buyers actually want when wholesaling. Think about the buyers as being the customer and you're shopping for what they want. If you had let's say 20 buyers you built a relationship with, I'm sure they all have different buy boxes. I've wholesaled for many years to the same 15 people, adding a new buyer every now and then simply for this reason. I knew exactly what they wanted by % and criteria. I know my MAO is 83% for three buyers wanting rentals with minor repairs and at least 75% for some wanting cosmetic custom remodels and a few that want entire remodels at 68% or below.