How To Factor Your Wholesale Fee?

[Frantzces Lys]

Hi Everyone,

I have a question. I am hoping that this will be my first wholesale deal. I have a motivated seller who owns a condo in a very sought out neighborhood in DC. It's a 1 bedroom 1 bath condo about 502 sq. ft. Condo fees are $467, yearly taxes are $2,062. It's in poor condition. Condos are selling for $300k in the building. The taxed assessed value is $242,600. 

Things that need renovating:

The kitchen

The bathroom

New floors (or rebuffed)

All new paint

New cabinets

All new appliances

New counters

I have an investor that is willing to offer $150-200k for it. I think this would be a good price for the owner, she is elderly and needs some savings.

What would be a reasonable wholesale fee be? I have a hard time factoring those numbers and what a good rule of thumb is.

Thank you in advance!

[Darrell Jones]

@Frantzces Lys

If you're dealing with an investor who knows what they're doing then he/she is going to want accurate numbers on the total repair cost. You say that those condos are selling for 300K make sure that's an accurate Comp as well. The formula a lot of investors go by is ARV x .70(or .65) - Repair Cost - Wholesale Fee= Your offer Price. What I've learned from a lot of successful wholesalers or Investors who are buying from the wholesalers is not to be too greedy with the wholesale fee. Leave some meat on the bone for the end buyer as they say. Good Luck I hope this was of some help to you.