All Forum Posts by: Dan Demers

All of this information is very helpful. I am going to start making offers with the intent to wholesale soon. When you use contingencies do you use several, or is one typically sufficient? For example, if you are going to use the "contigent upon buyer's contractor verifying estimate for rehab costs," would you bother to add an inspection clause?

Another clause that my mentor uses is "contingent upon my business partner's approval." This is done with the idea that since the business partner is not named, pretty much anyone could come and say they don't approve and get him out of the deal if it is needed.

I am still considering how ethical these contingencies are. It seems that there is an ethical way to use them, such as when you honestly don't think you will need them, but want the added protection. But it also seems like they could be abused when used carelessly. What do you think?

So it's all about wiggle room. It sounds like your formula would definitely eliminate any or most risk from the equation. Do you have statistics or can you estimate what percent of your offers are accepted?

Thanks Jason. That was what I was hoping to hear!

Jason. Thanks for sharing your experience with that deal. I just came across it now. I have been working with a mentor who uses the formula 70% of the ARV, minus repairs, plus holding and closing costs to determine his offer. I'm not sure why he mentions holding costs, because you aren't holding anything in a wholesale deal. He also doesn't take into account the assignment fee in his offer price. Can you explain how you decided to use your formula, and why my mentor's formula may or may not work as well? Thanks.

I have been working with a few investors for 6 months now, and feel like I am almost ready to start wholesaling on my own. With an understanding of reasonable offer prices, market comparables, and contracts, as well as a decent (I think) network of investors, do you think it is reasonable to start making offers? The last thing I want to do is get myself in over my head, or mislead a seller and have to back out of a contract. It seems like a simple process - can you suggest some details that I may be leaving out? Or maybe a good book that would have those details? Thanks.