All Forum Posts by: Christy Barton

There are definitely situations that are just odd and yield a very nice profit:  a seller may offer you a super low price, just to get rid of the headache... or maybe you found a house in a flip area where rehabbers will pay top dollar...  or maybe you have an out of state investor who thinks $60k for a house is a bargain when it's really only worth 20k.  Yes, things like this happen. However, I'd say $45k is not the average fee a typical wholesaler would make.  You'd have to be targeting flip areas or investors who don't know the market.  I'd say those are not the norm, though.  

We average $5-10k/deal.  Maybe we are doing something wrong.  Lol 

Sorry for not being more thorough in my response. Everyone is different, but we usually take 5% of the ARV, so is this case, $10k.

Don't forget to also subtract your fee!  :)  

If your ARV and rehab costs are on target, and you include your fee, that is the same formula we use.

Let us know how it works out!

@Brandon Turner or

@Joshua Dorkin

Can one of you help answer this question?

Welcome to BP!  You will find tons of great information here and a lot of investors to bounce ideas off of and get encouragement.  I know this is a little late notice, but if you're free Sunday night, there is a BP meet up taking place in Lima OH with Ben Leybovich and Brandon Turner this Sunday.  More info can be found here:  http://www.biggerpockets.com/forums/521/topics/195...

If you can make it, apply to the thread so Ben knows you're coming.  This will be an awesome meet-up and I think you could really benefit from attending!  If you can't make it, make sure you hit up your local REIAs, listen to podcasts, read the blogs, and find others (through the Network tab) here on BP that live close to you.  You can also set up keyword alerts to notify you about forums/blogs/etc of subject matters that interests you.  I use keyword alerts to notify me of any posts made about Indianapolis.  :)

Feel free to reach out to me if I can help you.  Again, welcome to the club!

I'm really going to get addicted now.  Thanks BP.  lol

Hi Orlando,

We avoid all this by purchasing the property with another wholesaler.  Teaming up with someone who has the cash to close has been huge for us.  We don't have to assign any of our contracts so the seller never knows the profit we make when we do the final sale.  The arrangement we have is this:  we find the deal, he makes the purchase, both parties look for an end buyer, and both parties split the profit 50/50.  

If you don't know a good wholesaler with cash in your area that is willing to work out a deal like we use, then just do a double close if the profit will be over 5k (or come up with what your threshold for a double close will be).  For the smaller profits, just be upfront and honest with the seller.  We typically explain that we may not purchase the property ourselves and to help mitigate our own costs/risks, we might make a few thousand to get the deal to the closing table.  If they get all up in arms with that over a few thousand, then it's not worth the headache.  If you think the deal is good enough to get 5k+, then just do a double close.

I agree with Devan by suggesting you try to pay a college kid or a stay at home mom to do your letters for you.  For a while, this is the approach we took, especially when our budget was low.  We paid a family member to handwrite the envelopes and the letters we used were typed.  Even though we used typed letters, we still get good response rates because the envelope itself is handwritten, and that's what I think gets people to open the letter.  Also, we found the "handwritten" letters from the direct mail companies don't look "handwritten" so it's kind of a waste.  Some of the callers who received our typed letters commented and said they looked very professional so if you're looking to save on costs, something like that might work.  

We paid a family member .20 per envelope.

Getting creative with your letters is huge.  Since we got "creative," our response rates went form 2-3% to 5%.