Full service wholesaler?

Question

Are there wholesalers in Colorado offering detailed rehab quotes from GCs, scope of work, or detailed comps as part of their listings? Most of what I see are very basic rehab numbers and one or two comps. Obviously, not looking for a total pro-forma or due diligence, but something that might help quickly weed out properties would be nice.

I'm not sure if this something anyone offers or maybe I haven't found the right team.

Bill S. · Answer

@Lucas Miller. So this is the challenge from my perspective. Contractors are super busy. No one has time to go around preparing bids for wholesale deals that may or may not happen. The only people that would use them are newbies that don't have their own people. Newbies come with their own set of headaches from a contractor perspective. I suppose I could pay someone to generate them but I don't think they would be real numbers as the "contractor" would spend most of their time preparing bids.

For me, the approach is to pick an area and learn it inside out. Know what everything is selling for in any condition. You can see a deal and then you can immediately tell if there is margin there. Once you have $50,000 in margin then you can dig in and see what you can do for that money and still make a profit. That $50,000 margin is very low on a $250,000 property which tends to be on the bottom end of our market. I start smiling when I see $100K in delta between the seller's price and what it would sell for fixed up (once the property price crosses $350K that margin increases as well). Note it doesn't happen very much. Even then, anything aside from a standard kitchen bath rehab would make me look at my numbers more closely.

To get your own experience. Pick a deal, go to Home Depot and price everything you need to put it together the way you would want. Multiply that by 1.25 and then add it to material costs. Once you do this a couple of times, you will get an idea of what a kitchen or bathroom costs. If you find something that seems to make sense then, get a contractor to give you firm bids and compare them with your numbers. If you were too low adjust accordingly. If you were too high then, buy it. Sounds easy right :). Devil is in the details.

Happy investing.

Travis Sperr · Answer

In our market I see wholesalers are getting away with the bare minimum and still selling their deals. I think that if someone included all inclusive information you are inquiring about, it would show the deal actually doesn't make sense. Further, everyone's numbers will always be different on every deal so you can use the numbers are a ball park but not as gold.

Michael Garrison · Answer

I am a wholesaler in NW Florida and am probably the only one that provide a huge amount of information.

I provide comps and a repair estimate. I also provide a rehab semi scope of work. I even provide the parys and material sku#s that "might" be used to do the deal.

Only problem here is, who's buying the property? Not me. And maybe not even a rehabber. If its a landlord they might not want to do that kind of work to the property.

Might be a waste of time but I think it adds credibility to what it is you do. You look to others to be much more professional.

After all it is the buyer and his/her contractors that have to make the ultimate decision. They might get a much better discount than I can negotiate on material or labor.

Larry F. · Answer

Probably a different perspective here. But as a wholesaler, I always have the exit strategy of flipping the house if no willing rehabber is stepping up to the plate. I am an experienced rehabber so I get my contractor to write up a bid for repairs and provide multiple comps of "sold" properties as was a (realtor for 8 years) so I know how to do this as well. With all this information I prepare a comprehensive report with all the data.

The results of this work is many times rejected by prospective buyers as "too low estimates" or, "comps" are too high. They do this as a negotiating tactic to drive down my price which is alway at or near 65% of the ARV. The problem is that they do not do their due diligence to confirm the numbers. Very aggravating so now I tell the buyer that they should do their own work on comps and repairs and save myself the trouble.

Just a perspective of a very active wholesaler.

Adrien C. · Answer

I learned this on my first deal and it's emphasized on every deal I do: You can NOT please everyone. Someone will think your comps are overly high, the rehab is too low, the house is in a ghetto, etc. The next investor comes through and thinks you're giving the property away and it's the best deal he's seen in a year.

I give as many comps as possible (sometimes up to 10) and include both low end comps that usually are outdated old granny houses and high end comps usually a rehabbed house. I take dozens of pictures and videos to display the condition of the house. I list obvious things that need to be rehabbed. I give a general rehab number for someone doing the work themselves and a general rehab number for a investor using contractors. I give enough info so if the investor is interested, they'll want to take a look and give me an offer.

Luke Miller · Answer

That's what I figured, @Travis Sperr. Good luck @Jacquelyn Sarpong

Jacquelyn Sarpong · Answer

I'm a newbie and is good to see that that's what investors are looking for.  I'm a wholesaler but plan to do it virtual.  More like a lead generator with underestimating ARV and overestimating repairs. I feel if i stick to this.  I'll be better off

Luke Miller · Answer

It's good to hear the perspective from the wholesaler side. I hadn't thought about much of that. Sounds like it really depends on the market and the individual.

Full service wholesaler?

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