Formula for finding the best city in which to wholesale.

[Roy Leach]

I'm sorry if this has been covered a zillion times before.  I didn't see anything in my search so here we go.

In the Denver market, there aren't a ton of deals out there because there isn't a ton of inventory.  This means that any inventory out there is high priced (even for distressed properties).  Seems that the amount of return for the amount of effort currently in the Denver market is excessive.  There's got to be somewhere else that I can get more deals.  I can put together a team anywhere in the US but the big question is WHERE...

I'm trying to find a formula to determine what the best city to wholesale in is (okay, it doesn't have to be wholesaling, but that's what I do so that's my focus).

The formula I'm trying out is... 

Number of properties listed on MLS / number of people in the area.

Now, I know that most of my deals are OFF MLS, but I don't have any way to get the number of those properties, so assume that there is some correlation between number of MLS properties and the number of off MLS properties (even if we don't know what that exact correlation is)

So for Denver, there are currently 1015 properties for sale on the MLS (I told you it's tight out here!) and a population of 650,000

1015 / 650000 = .0015

The actual mean of this number isn't too important (I don't think).  Rather, I'm using it as a metric to compare it to other places.

Oklahoma City's number:

2920 / 610000 = .0048

Okay... just looking at the fact there are almost 3 times as many homes listed in OK City as Denver with a similar population tells me that there should be a bit more inventory to wholesale.  So for OK City, the magic number is about 3 times that of Denver (go figure... that math stuff is pretty consistent :) )

Tulsa comes out as:

2974 / 400000 = .0075

So this means Tulsa should have even more homes available per capita and maybe an easier market still.

Of course, you have to pick large enough markets to be worth your while, so I don't know that this would work for Blythe, CA (174/19000 = .0092) even though the number is awesome!

Now the big question...
Does anyone have any other input or thoughts on other variables to consider?

[Bill S.]

@Roy Leach more inventory means harder to move deals. Wholesaling isn't easy in any market. You are just trading one problem for another. Denver = hard to find deals, Tulsa = hard to sell deals. The lack of inventory doesn't mean there are fewer motivated sellers. It means you have more motivated buyers. Just my 2 cents.

I would add that if you think there are no deals then there will in fact be no deals. Ponder that for a bit.