good wholesale price in San Antoino?

[Britney Gaudet]

i just mailed out my first set of letters, now im just waiting for my phone to start ringing!

  im wondering what a good price for a house would be in San Antonio? i will be wholesaling and dont want to have the contract sitting. 

[Seth Teel]

Since we don't have a subject property to go off of, we can look at current wholesale market percentages and give you a ballpark based on theoretical numbers. Over the past 6 months in San Antonio I have seen wholesale deals sell at about 74% to 80% of ARV (minus) Repairs. The variance in percentage has to do with a combination of several factors. Typically wholesale deals that make good rentals, will have a higher percentage (approaching 80%). 77% to 80% is commonly seen from the "big box" wholesalers in town for their rental inventory. I have also seen these percentages applied to highly desirable areas (NW, NC, Far North, & Historic Areas) as well to higher priced flip properties with larger potential net profit.

The vast majority of wholesale flip deals I see are put out at 74% to 78%, variances based on location of property, desirability, whether it's a small-time wholesaler or a large organization (i.e. experience and/or size of buyer pool), and potential net profit.  

A simple scenario ex is:  
Subject Property = 123 Main St. (Flip)
ARV = $175K
Repairs = $45K
Wholesale Price = $84.5K (approx 74% deal

On paper this looks to be both good deal percentage-wise and from net profit-wise (before considering carrying costs, resale costs, etc.).

Don't forget when running your numbers to add in your fee! I typically see fees from $3K to $10K for proeprties under $100K purchase price, and $10K or more for properties over $100K purchase price.  There is not set rule or amount.  The key is to not be greedy, but don't leave too much money on the table either.  It may take you a while to find a balance, but a good wholesaler is worth their weight in gold (literally).  

The most important thing is to make sure your numbers are good! Many wholesalers fudge on the ARV or lower the rehab budget in order to make a deal work or maximize their fee. Anyone that has wholesaled before has been guilty of this. It happens. Make sure that you don't make it a habit. If you get a reputation for over-priced properties, low rehabs, and/or inflated ARVs, your properties will sit.

Hope this helps.