New Wholesaler here! Question about ARV

[Haider Zaman]

Hello everyone!

I am a licensed Realtor here in Richmond, VA and have been trying to understand the ART of wholesaling. I do have a question regarding the price I (the wholesaler) negotiate with the seller. What is the ARV (percentage) that I should look to get the property at, so that I may turn around and assign that contract to an investor?

I also read somewhere on BP that wholesalers are negotiating properties at 70% ARV (minus repairs, etc), but I was under the impression that the 70% ARV figure was for investors? I thought the wholesalers ideally should stick to the 50-60% ARV? (or any other ARV suggestions for the wholesaler would be greatly welcome)

I would greatly appreciate it if someone could help clarify the purchase ARV percentage for the wholesaler.

Thank you sincerely,

[Priscilla Z.]

@Haider Zaman I stick to the formula.  Wholesale fee, like @Russell Ponce 

 said, I usually stick to 10K.  There have been times where you have to go lower and other times you get to go higher.  You will know the more you do.

@Damon Armstrong Don't overthink things. I'm also a rehabber so I know this formula works. Yes, we go over estimated expenses all the time when rehabbing a house, it's the name of the game, but sometimes we can sell it for more too. Now, if you use the 70% formula and ALL of your buyers come in and tell you that you are underestimating repairs and no one is interested, then go back and renegotiate on the price, or come down on your wholesale fee.

It really is as simple as it sounds.  Find a deal that fits the formula, pitch it to your buyers, sell it.  Know your numbers, that's what it's all about.