All Forum Posts by: Chris Coughlan

That's what I thought.
I'll need to keep track of each buyers parameters.

Thanks

i plan on wholesaling. i was under the impression that i needed to figure out the ARV to come up with what I offer the seller and what i try to sell to the buyer for.

When trying to figure out what to offer the seller, is it better to:

To figure out what your investors will pay and then subtract your assignment fee?

400K ARV w/ 20K repair costs
400K x 60% = 240K
240K - 20K = 220K

220K - 10K assignment fee
So you would offer the seller 210K

or is it better to make the offer first:

400K ARV w/ 20K repair costs
Offer them 200K (50%) of ARV

400K ARV w/ 20K repair costs
400K x 60% = 240K
240K - 20K = 220K

Then I would end up with 20K rather than 10K assignment fee.

I guess it could go either way. You probably have to work the numbers, consider how desperate the seller is, and know what numbers your investors are looking for...

You'll need a offer contract as well with a contingency clause based on inspection/financing etc.

So here's an example:

I come across a motivated seller. After getting some info from them and getting some comps I determine that the ARV is 200K with 20K in repair costs.

I offer them 100K (50% of the ARV) and they accept it.
Now I'm going to try and find a buyer for it at 60% ARV.

200K x 60% = 120K
120K - 20K = 100K

Obviously these numbers don't work since I'd be breaking even.
In order to make this deal worth while I'd either have to:

1) Offer the seller less than 50% of the ARV.
2) Try to find a buyer who will pay more than 60% ARV.

How likely is it that a seller will take less than 50% of ARV? I guess they have to be pretty desperate?
If investors want at least 60% ARV then it sounds like wholesalers can only make money on severely undervalued homes.

Thanks.

Chris

hmm....
at 70% ARV there is 80K to work with. now i know that it never ends up being 80K but that still sounds like a nice profit. even with 30K in repair costs and a quick sell they are looking at around 50K profit.

the few that i have heard of are:

zillow.com
realquest.com
cyberhomes.com

but Mike is right. Unless those sites list the prices of what surrounding homes have actually sold for then they are usually way off. driving through the neighborhood and comparing with homes on the market is best.

I have read that when you make an offer to a seller it should be between 40% and 60% of the ARV

As a general rule, what percentage will an investor pay of the ARV? 70%? More? Less?

Let's say there is a house with a 200K ARV and 20K in repair costs.

How do you figure 70% of that?

200K x 70%= 140K
140K - 20K = 120K

or do you do it this way?

200K - 20K = 180K
180K x 70% = 126K

So would I offer the property at 120K or 126K?

Thanks,

Chris

What is the cheapest site to order 18x24 bandit signs?

Thanks,

Chris

I did earlier this week. It includes a TON of info. I have just gotten started reading through all of the info and so far so good. If interested I can get you in to the program for quite a bit less than listed. Let me know if you have any other questions.

Chris