First Wholesale Deal - Or Is It?

[Kate Pierse]

A big hello to everyone in the Forums, I'm on this site every day and am always amazed at the quality of people and the responses. I would love to know if those more experienced investors out there think that this property would be something you would consider purchasing from a wholesaler. I already realize its not a slam dunk deal but the market is so hot in this area, its the best I've seen for a while:

Purchase price: $105,000

ARV: $140,000

Monthly rent (based on recent comps): $1100-1150

HOA: $85/mo Taxes: $168/mo

Repairs: $5,000 (paint and little linoleum)

The property is a townhouse in the most desirable part of where I live, the area is in high demand.

If you have any thoughts on this I would really appreciate hearing them. Thank you!!

[Brian Gibbons]

Not with a fast turn around, you are selling fast.  

I always sign a listing agreement at the time of signing the JV agreement and the subject to paperwork. I own it I fix it I resell it quickly.

A light rehab is different then a big rehab. The light rehab the cost $5-$10,000 is a good win win on the JV agreement as long as your profit is certain.

Do the math on a 70% ARV on a $5000 rehab that if resold is in the 150 range the seller only gets about 50% of appraised value whereas they can net a lot more money if you help them rehab the property and so on the JV with a modest $10,000 profit.

This thinking can be taken toward probate properties where the kitchen and bathrooms need remodeling but everything else is sound with the foundation the roof HVAC etc. just updating the cosmetics and reselling quickly at a competitive price could help perhaps some probate houses that have that grandma look to them that need updating in order to get top dollar.

If you're an agent and you can be a light rehab specialists you could let the world know that people don't need money to improve their properties if they jv with you and then you can get a commission plus a modest JV feet of let's say $5000 and make more money and solve peoples problems.