Pricing a Unique Property (potential wedding venue, horse property, or private home)

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Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes

@Laura Mateya

Something like this I believe will be challenging to wholesale sue to its price point.

I would recommend having general contractors bid the property so you have accurate estimates and get an appraisal on it.

Of course location will matter as well.

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Don KonipolBusiness Member

Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes

3y

Quote from @Laura Mateya:

I have a family member willing to allow me to wholesale a property. It is situated on 10 acres with potential for many different uses. The main house is a Georgian estate style 5600sf home (6BR 7BA) that needs water damage repair as well as some updating. The outbuildings include a guest house with a wraparound porch that needs to be replaced, a 6-stall horse barn with an apartment on the top floor, which is in decent shape inside but needs some cosmetic repair outside, a storage barn with 8 garage bays on the lower level and open storage on the top floor, and a historic gristmill (with a water wheel) built in 1820. It is located right on a river and has 2 dams that are currently in pace making a gorgeous pond in the backyard. It has amazing views from the back of the house. There is SO much potential here. I would like to price it somewhere in the middle of the potential range, meaning that the minimal amount of work is probably $300-400K in repairs in the main house, with an ARV of around $2-2.5M or someone could put $800K-1M into it and really go all out to where it has about a $3.5-4M potential ARV. Any input would be greatly appreciated.

It was previously a wedding venue and could potentially be one again. It could make an amazing airbnb. It could be a wonderful horse property, or a retreat center... the grounds are absolutely

First question is WHY would the owners want to accept a lower WHOLESALE price when they could just as easily obtain a higher RETAIL price? In other words, what is their motivation for accepting LESS money? Quick sale needed? Confidentiality? Had it listed previously and didn’t sell?

Second question is are the sellers willing to accept a WHOLESALE price? Not the price you agree to pay them (if you are dealing on that basis), but a REAL, MARKET wholesale price? Now, it may be that the price you agree to pay IS a real wholesale price, which is fine. The thing to guard against is accepting a higher than realistic wholesale price (less the "markup" you hope to earn) just to secure the deal. Often sellers, especially of unique properties, think in terms of 10% differential between wholesale and retail. For SFR it's more like 30%, for unique properties like this it could be 40% +. So if the retail, MLS, exposed to market price/value is say $2million, as is, wholesale may be $1.2 million, as is. If they expect in our example $1.8 million, you're not looking for a wholesale buyer, you're looking for a retail buyer willing to close quickly for cash, and getting a "small" discount for it.

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David Ramirez

Investor · Tampa, FL · Member since 2019 · 1k+ posts · 1k+ votes

3y

Hey @Laura Mateya,

Call every horse property owner in a 5-mile radio and offer them the property. Since you are related to the seller you have enough time to really promote and spread the word around. Feel free to reach out with any questions!

Good luck!

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Laura Mateya

OP

Member since 2023 · 3 posts · 0 votes

3y

Quote from @Don Konipol:

Quote from @Laura Mateya:

I have a family member willing to allow me to wholesale a property. It is situated on 10 acres with potential for many different uses. The main house is a Georgian estate style 5600sf home (6BR 7BA) that needs water damage repair as well as some updating. The outbuildings include a guest house with a wraparound porch that needs to be replaced, a 6-stall horse barn with an apartment on the top floor, which is in decent shape inside but needs some cosmetic repair outside, a storage barn with 8 garage bays on the lower level and open storage on the top floor, and a historic gristmill (with a water wheel) built in 1820. It is located right on a river and has 2 dams that are currently in pace making a gorgeous pond in the backyard. It has amazing views from the back of the house. There is SO much potential here. I would like to price it somewhere in the middle of the potential range, meaning that the minimal amount of work is probably $300-400K in repairs in the main house, with an ARV of around $2-2.5M or someone could put $800K-1M into it and really go all out to where it has about a $3.5-4M potential ARV. Any input would be greatly appreciated.

It was previously a wedding venue and could potentially be one again. It could make an amazing airbnb. It could be a wonderful horse property, or a retreat center... the grounds are absolutely

First question is WHY would the owners want to accept a lower WHOLESALE price when they could just as easily obtain a higher RETAIL price? In other words, what is their motivation for accepting LESS money? Quick sale needed? Confidentiality? Had it listed previously and didn’t sell?

Second question is are the sellers willing to accept a WHOLESALE price? Not the price you agree to pay them (if you are dealing on that basis), but a REAL, MARKET wholesale price? Now, it may be that the price you agree to pay IS a real wholesale price, which is fine. The thing to guard against is accepting a higher than realistic wholesale price (less the "markup" you hope to earn) just to secure the deal. Often sellers, especially of unique properties, think in terms of 10% differential between wholesale and retail. For SFR it's more like 30%, for unique properties like this it could be 40% +. So if the retail, MLS, exposed to market price/value is say $2million, as is, wholesale may be $1.2 million, as is. If they expect in our example $1.8 million, you're not looking for a wholesale buyer, you're looking for a retail buyer willing to close quickly for cash, and getting a "small" discount for it.

Don,

Thanks for the questions...I will do my best to answer. For the record, I am a newish agent (only 2 transactions under my belt) in another state, and I am new to wholesaling but have been studying it for about 4 months now. I see the income potential as so much higher in wholesaling!

First of all, they gave me the number they are willing to accept, but I would like to get them more, while making a good profit for myself. And yes, it IS a wholesale price... they are willing to let me try to wholesale it for my benefit. (They are my immediate family.) When they decided on the price, they used the '70% minus repairs' formula on the lowest ARV after basic repairs. I told them the property has so much more potential and I would love to get them and myself a bit more if possible. It was part of a recent acquisition and they are subdividing it off, selling the main house and some of the other buildings.

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Lydia R.

Investor · Austin TX · Member since 2016 · 1k+ posts · 2k+ votes

3y

Just my two cents, be careful that you aren't engaging in brokering without a license because helping someone 'find a buyer' is an activity for a licensed agent. Also, this isnt really an 'investor' type of property. The entire premise of wholesaling is finding value add properties that investors can purchase at a discount. The property itself sounds fantastic but it definitely doesnt sound like the type of property a cash buyer/investor is looking to purchase. Im not sure how much, if any, wholesale experience you have but this definitely doesnt fit into the traditional wholesale model at all. I totally understand that you are trying to maximize what you think is an opportunity since you are related to the seller but this isn't the opportunity you think it is. Also consider, at that price point its highly unlikely the end buyer will have cash or hard money and banks dont pay wholesale fees. So if your end buyer is getting a loan from a bank, the only way for you to get paid is to have the end buyer pay you directly. I wish you good luck, and this will certainly be a learning experience for you but I dont think the end result will be you closing your first wholesale deal.

Have you tried looking for distressed property in your area?

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Tom GimerBusiness Member

DMV · Member since 2017 · 3k+ posts · 3k+ votes

3y

I agree with @Lydia R. and @Chris Seveney ... this isn't a wholesale deal. Around here a unique property such as this would make a great public auction candidate.

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Laura Mateya

OP

Member since 2023 · 3 posts · 0 votes

3y

Quote from @Lydia R.:

Just my two cents, be careful that you aren't engaging in brokering without a license because helping someone 'find a buyer' is an activity for a licensed agent. Also, this isnt really an 'investor' type of property. The entire premise of wholesaling is finding value add properties that investors can purchase at a discount. The property itself sounds fantastic but it definitely doesnt sound like the type of property a cash buyer/investor is looking to purchase. Im not sure how much, if any, wholesale experience you have but this definitely doesnt fit into the traditional wholesale model at all. I totally understand that you are trying to maximize what you think is an opportunity since you are related to the seller but this isn't the opportunity you think it is. Also consider, at that price point its highly unlikely the end buyer will have cash or hard money and banks dont pay wholesale fees. So if your end buyer is getting a loan from a bank, the only way for you to get paid is to have the end buyer pay you directly. I wish you good luck, and this will certainly be a learning experience for you but I dont think the end result will be you closing your first wholesale deal.

Have you tried looking for distressed property in your area?

Thank you for your reply. I totally understand what you’re saying. The property is definitely a distressed property, as no one could really live in it the way it is. But I understand that it may be too high of a price point. Thanks again.

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Steve K.

Realtor · Boulder, CO · Member since 2016 · 3k+ posts · 5k+ votes

3y

Quote from @Laura Mateya:

Quote from @Don Konipol:

Quote from @Laura Mateya:

I have a family member willing to allow me to wholesale a property. It is situated on 10 acres with potential for many different uses. The main house is a Georgian estate style 5600sf home (6BR 7BA) that needs water damage repair as well as some updating. The outbuildings include a guest house with a wraparound porch that needs to be replaced, a 6-stall horse barn with an apartment on the top floor, which is in decent shape inside but needs some cosmetic repair outside, a storage barn with 8 garage bays on the lower level and open storage on the top floor, and a historic gristmill (with a water wheel) built in 1820. It is located right on a river and has 2 dams that are currently in pace making a gorgeous pond in the backyard. It has amazing views from the back of the house. There is SO much potential here. I would like to price it somewhere in the middle of the potential range, meaning that the minimal amount of work is probably $300-400K in repairs in the main house, with an ARV of around $2-2.5M or someone could put $800K-1M into it and really go all out to where it has about a $3.5-4M potential ARV. Any input would be greatly appreciated.

It was previously a wedding venue and could potentially be one again. It could make an amazing airbnb. It could be a wonderful horse property, or a retreat center... the grounds are absolutely

First question is WHY would the owners want to accept a lower WHOLESALE price when they could just as easily obtain a higher RETAIL price? In other words, what is their motivation for accepting LESS money? Quick sale needed? Confidentiality? Had it listed previously and didn’t sell?

Second question is are the sellers willing to accept a WHOLESALE price? Not the price you agree to pay them (if you are dealing on that basis), but a REAL, MARKET wholesale price? Now, it may be that the price you agree to pay IS a real wholesale price, which is fine. The thing to guard against is accepting a higher than realistic wholesale price (less the "markup" you hope to earn) just to secure the deal. Often sellers, especially of unique properties, think in terms of 10% differential between wholesale and retail. For SFR it's more like 30%, for unique properties like this it could be 40% +. So if the retail, MLS, exposed to market price/value is say $2million, as is, wholesale may be $1.2 million, as is. If they expect in our example $1.8 million, you're not looking for a wholesale buyer, you're looking for a retail buyer willing to close quickly for cash, and getting a "small" discount for it.

Don,

Thanks for the questions...I will do my best to answer. For the record, I am a newish agent (only 2 transactions under my belt) in another state, and I am new to wholesaling but have been studying it for about 4 months now. I see the income potential as so much higher in wholesaling!

First of all, they gave me the number they are willing to accept, but I would like to get them more, while making a good profit for myself. And yes, it IS a wholesale price... they are willing to let me try to wholesale it for my benefit. (They are my immediate family.) When they decided on the price, they used the '70% minus repairs' formula on the lowest ARV after basic repairs. I told them the property has so much more potential and I would love to get them and myself a bit more if possible. It was part of a recent acquisition and they are subdividing it off, selling the main house and some of the other buildings.

You should probably not be selling property that you don't own, in a state that you're not licensed in (check the laws on this). Just refer the listing out to the top agent in the area that specializes in horse property. Ask for a 25-30% referral fee. It will be better for everyone.

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Pricing a Unique Property (potential wedding venue, horse property, or private home)

Pricing a Unique Property (potential wedding venue, horse property, or private home)

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