ARV and fair wholesale offer

[Aaron Hoye]

Ok I have heard it all, do at least three comps within a three mile radius of like properties, subtract repairs, include your wholesale fee.  I haven't got one offer accepted,. Someone please give me the run down, I know this is the million dollar question.  How to make a fair offer that will get accepted with enough meat on the bone to pass it along?

Aaron D.

[Steven Leigh]

@Aaron Hoye Sean Terry has a great comp calculator and a good system for doing a quick analysis. I will say that the "Offer Price" always comes in WAY too low to be useful in my market, but if you look at the "Sell Price" for 70% of ARV and subtract your wholesale fee, that gives you a good idea of what your maximum offer could be. You'll understand what I mean after you watch the video.

https://www.youtube.com/watch?v=Cqgz5OpqvNU

The other thing is, you might have to adjust the repair numbers up or down for your market, as markets can be pretty different for repair costs.

As for finding an offer that will "get accepted" I agree with Brent. MOST of your offers won't be accepted. Just realize that upfront. 95% of people are going to sell their house at near-market value with a realtor and you will make an offer to some of these people and get laughed at or cussed at. You are looking for the 5%. It's a numbers game. You have to go through enough calls and make enough offers that you find a TRULY motivated seller who would rather have the convenience and ease and other benefits you can offer than they would the full market value of the house. Believe me, they are out there, but it takes time and grit to find them. The average is a 4% return rate on mailers, for example, and the average is about 40 calls to get 1 workable wholesale deal. So figure you need to mail to about 1,000 people to get 40 calls to get 1 deal. That means on average you will have your offer rejected 39 out of 40 times. But the good news is that 1 will likely make it all worth it if you have the guts to power through! Honestly, most people don't, which is why people say wholesaling doesn't work.

Good luck!