is this a deal???

Question

wholesalers only please.

I've been going back and forth with the bank on property in CA my potential first wholesale deal and I'm not sure if this is a deal or not 
zillow says its worth 135k and not just going off that it was last sold for 135k in 2007 and the house is updated and ready to live in. I have them down to their final and it 70k should I agree? how much would you wholesale it for?

Brad P. · Answer

My 2 cents:

-I love Zillow and it has a lot of useful information but using their Zestimate in place of ARV is not wise.  Also, using a comp from 2007 is another major issue:  1) Its only 1 comp and 2) I wouldn't trust a comp that was more than 6 months old.  3) Make sure your comps are very similar to this property (ie. same # of bed/bath, similar sq footage, same style of home, etc).

-While the property may be able to be lived in, I highly doubt it would take no renovations to be sold for your expected ARV...certainly there will be some work needed to get to the higher price point.

-To determine what you should wholesale it for, you need to put yourself into your buyer/investor's shoes.  How much work will it take, what will be their holding costs, etc.  Then take on your wholesale fee and if there is still a good amount of profit to be made, you may have yourself a marketable property to other investors.

Dave Smih · Answer

houses up the street are selling for $115k-$130k where im at houses sell way above there tax assesed value witch is 100k on this one. nobody pays full FMV nowadays here and finding FMV is hard when houses never sell for FMV Its just a reference point investors use to know how much below FMV there paying when they buy it but I believe and my Realtor believes its worth 115k -120k

James Gefke · Answer

Hi Dave,

There really isn't enough info evaluate this potential deal.  I don't know your market but where I am houses aren't selling anywhere close to what they were in 2007.  What it sold for in 2007 is really irrelevant at this point.

You need to do some research and find out what houses in similar in condition, size, and location are currently selling for to figure out whether or not it is a deal.

Sites like zillow and trulia are tools that you can use but your comps will be actual recent sales. 
Good Luck