Average % of ARV for Wholesale In Dallas TX

[Chris Colvard]

Hi:

I'm trying to get the input of BP rehab/sellers & and rehab/renters in the Dallas Fort Worth area on the average wholesale price they are actually paying for deals. Meaning the percent of ARV on actual deals you are closing.

I understand that each rehab cost must be verified by the investor. I also know that the current sales/market time and rent rates for the properties determine the viability of the deal. But, based on all of these factors being correct, can you give me an average of what is real?

I need to establish realistic criteria for offers I am going to make on REO tapes and other sources for acquisitions.

Your help is very much appreciated.

Thank you!

[Eric Tomlinson]

Chris-

One thing you have to keep in mind when wholesaling a fix/sell to an investor is that he/she has to close twice on the house, so that eats into the 'profit'. So its not quite as simple and saying roughly: purchase 100k, rehab 25k, sales price 165k = profit of 40k! It irks me sometimes when wholesalers try to have me dreaming that is what I will make. The wholesaler undoubtedly will have the investor pay for all closing costs, then holding costs, extra rehab costs (always happens), then the REI's buyer will have the investor pay for closing costs. $40k will get eaten up quite a bit.

So in the pitch to your buyers, you might have some other costs shown in there, so that the 1st time buyer won't lose his/her shirt but will come back for more because your figures were very accurate.

In respect to a buyer looking for rentals, I agree w/ Stefan and the 50% rule, but it doesn't take into account what an investor has in the property. I have purchased props, rehabbed them, cash out refi the property and put extra money in my pocket. In essence I was paid to own the house and it still cashflowed. It wasn't 50%, but what is the ROI when you have zero dollars in a rental? I personally like to be in a rental for 70% ARV or less after I rehab it.

Good luck!! There are probably many buyers from Dallas on here who would be interested.

Eric