WHOLESALING AND EQUITY??

[Antoine Smith]

SO, if I have a property in mind, a seller called, and the price is $123,000... the est. equity ( via propstream) is at $56,000... is this meaning that I should minus the $56,000 from the total $123,000? and then that would be the number i work from? I am very confused about this part..... I also used dealulator.com to use the deal calculator if that helps any. PLEASE HELP, I want to be sure i'm not wasting my time with potential deals from lack of knowledge. 

[Barry Pekin]

@Antoine Smith,

At the core of any RE deal is what the seller is willing to sell for and what the buyer is willing to buy for.  The equity matters only in that the loan(s) need to be paid off, and that's a factor in what the seller is willing/able to take.  For example, if they owe more than you're willing to pay, then there's probably not going to be a deal - unless you're able to get creative, but we should stick to the basics.

You didn't list the ARV, so I'm going to use made up numbers to a point. Let's assume PropStream gives you an ARV of $175,000. There are going to be repairs and/or upgrades that need to be made to the property. Let's assume that's $35,000. The buyer's typical MAO for a flip is going to be 70% or ARV minus the repairs, or $175,000 * 0.7 - $35,000, which comes to $87,500. Your fee would be the difference between that and whatever you can get it under contract for. This is way below the seller's asking price, so there's no potential for a standard deal here - again, with my made up numbers. Notice that I never used the seller's asking price or the equity in my calculations.

Here's my advice.  There are a lot of resources that teach wholesaling - books, classes/mentors, YouTube, etc.  Put effort into learning how wholesaling works.  Go get the book, "If you can't wholesale after this... I've got nothing for you."  It's a short and easy to understand book that explains wholesaling pretty well.  I initially got it on Audio.

If you've got someone calling you, then I assume you've got some sort of marketing going, and that's great.  Keep it up.  It's all about the marketing.

Also, start attending local REI meetups. Go to as many as you can.

Good luck!