Starting out on Wholesaling in Florida

[Ranjit Wasu]

Hi Guys,I have recently started out in wholesaling and have been doing some extensive reading and research and had a few questions to ask someone who has any experience in this field.

 I have purchased a list now and want to send out a mailing of yellow letters or using click2mail or some direct mailing agency, whichever is the most cost effective.  I have their phone numbers and addresses also now as well as the previous purchase price of the house and what its approx. valued at now.  Should I send a mailer out to all the tax mailing addresses, even if its different to the actual house address?

Has any got any advice in completing this stage? I am new and kind of sticking to a budget, but want to grow from this slowly.  I have used call rail, but hear its good to monitor the call backs.  I am just using a separate good voice number for now.

Can anyone also explain the rule of 70% ARV? as should i get calls, i want to be safe to calculate the right value and be able to wholesale it correctly and promptly.

[Steven Leigh]

@Ranjit Wasu I would advise you to ignore the negativity. I think the motivation is pretty obvious, and clearly not on topic in regard to your questions.

So...about your actual questions.

Yes, you should mail to the mailing address, not the property address. Those where the mailing address is different are called NOO or non-owner occupied, which means it's likely being rented out, or even better, it might be empty! These are good leads. You could have a tired landlord who wants out, an inheritance, etc. That's not to say that owner-occupied properties are bad. In fact, they can be great leads too, if there is equity.

For 70% ARV, it's 70% of the After Repair Value. So, let's say the house would be worth $100,000 completely updated and fixed up. So $100k is the ARV. An end buyer investor generally wants to pay about 70% of ARV, minus repairs. So let's say it needs $10,000 worth of repairs. 70% of ARV is $70,000 and then subtract $10,000 for repairs, so an end buyer would want to pay about $60,000.

Then you have to build in your assignment fee, so let's say you want to make $5,000 on the deal. You would want to get it under contract for no more than $55,000 in that case.

Here's a good method from Sean Terry for calculating comp values. However, I don't use the "Offer Price" because it always comes in way too low. Instead, look at the "Sell Price" for 70% ARV and subtract your fee. That will give you an idea of your Maximum Allowable Offer (MAO). You will understand what I mean when you watch the video and test it out.

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