Hi,
I have found a motivated seller of a 8-unit apartment building. I am looking to wholesale it if we can come to terms. She told me the rents but she hasn't told me the expenses because she couldn't remember. She said she would get back to me. I haven't seen the building so I don't know the repairs
Should I use the 2% rule (Gross Rent divided by .02) to use as the starting point for my offer? For example if 2% rule for $5,200 monthly rent is $260,000 I'm thinking of using 70% of that price minus expenses and my wholesale fee as the highest offer I would give.
For example
Rent $5,200
2% rule $260,000
Offer = (70%) $182,000 - repairs $25,000 - wholesale fee $10,000 = $147,000 highest offer
Of course if the repairs are more than $25,000 I would have to adjust
