Is my offer too low?

[Aron DeVoe]

hey bp I've been taking massive action and have finally found a solid motivated seller! I've never done a wholesale and I'm not completely confident on my numbers so I'm here looking for a some help.

Seller wants 150k. property is a COMPLETE rehab project 

the property ARV = 265K I've averaged the price from 5 properties in the neighborhood that have sold in last 6 months

Ive calculated repairs out to be 50-60k

so I've come to the conclusion of a MAO of 127K

how do my numbers look and should i offer closer to the 150 seller is looking for?

[Jerryll Noorden]

Originally posted by @Siobhan Kelly-Roberts:

Originally posted by @Anson Young:

I agree with your assessment, at 150k the profit margin is roughly $15k or so.  VERY thin deal.

Congrats on taking massive action!

15k is a THIN? And for a first deal at that?! Damn man, I'd love to see the numbers you're doing! Haha. 

 Yeah dude. OMG that is SUPER thin.

We do not touch a flip unless we get at least $40K to $50K.

Keep in mind. this 15K is NOT what he is getting guaranteed. This is if NOTHING goes wrong.

That never happens.

OP, this is a mistake most of you newbies are making.

Why did you write "Seller wants XXX"?

It is ABSOLUTELY IRRELEVANT want the seller wants.

You make offers that work for you. Period. This is not the same is "take advantage of the seller". You are a business, in the end of the day you need to make money to keep your business model alfoat and running smoothly.

You make offers based on your numbers. If that number ALSO works for the seller, then GREAT! If not, THEN you can find out other more creative solutions... 

But you should NEVER EVER have the need to ask anyone for advice on thin numbers. The second this happens, it means your investing model is wrong. You make offers based on the ARV, COR, Closing costs and other fees, and your profits (NEVER what he seller wants). Nothing else!

The reason most people struggle with wholesaling is because they treat "every case personal".. yeah that sounds good on your website, and on paper, but the reality is, if you want to make 40+ deals every month like clockwork, you need a system that runs like a well oiled machine.

Lead comes in, call the lead, vet the lead. If a good lead, schedule appointment ASAP, do the walk through estimate COR, find the ARV, make an offer, sign the contract send the contract over to the attorney, and by that time you should have the next appointment scheduled.

System!