Formula for Wholesaling Buy and Hold

[Michael Huey]

Hey bigger pockets family, 

I'm a wholesaler and I'm bout to get a property under contract. The thing with this deal is I know it'll be a great rental property because of the area. I want to know should I use the same formula as if it's a flip or is it a different formula for a rental property?

[Micah Copeland]

@Michael Huey

Hey Michael the easiest way to answer this is NO.

Quick explanation.. when you wholesale a deal as a fix and flip you will use the 70% rule to pitch it to investors.. You are selling them on the big pay day.

When you wholesale to a buy and hold investor you will use the Gross Rent Multiplier. If you aren't familiar with it then just type it in the search bar at the top right hand of your screen and read all the posts until you understand! Basically you are selling buy and hold investors on the cash flow and their all in cost compared to how much they can charge for rent. 

I love selling to buy and hold investors due to the fact that you do not have to get properties at a super deep discount as much as you would for a flipper. 

If you have anymore questions feel free to reach out to me.