All Forum Posts by: Lari A.

If anyone can give me some insight on my numbers (where I miraculously got the property for $262,865), I'd appreciate knowing if my thinking is correct or not.  Thanks!

No, which is another area of confusion for me. Is that a part of my responsibility as a Wholesaler? Since this is my first attempt at evaluating a deal, and since I don't have a mentor, I'm not exactly sure of the steps that I'm responsible for. I feel comfortable determining interior rehab costs, and pretty comfortable with running numbers (ARV, MAO and CAP Rate %). But, doesn't the end buyer do the diligence regarding liens, mortgage balance, etc., within the inspection period designated in the Purchase Contract? I've read so much on wholesaling, and don't recall reading that I should check for liens on a property that I'm hoping to wholesale. If that's part of my "job", I certainly need to be doing that!

Yes James -- I have buyerS lined up, and I don't know why the property was marked so low.  The Seller seems to be in her right mind, and even though I don't have any official remodeling experience, I feel comfortable with the walk-through (the roof and HVAC are fairly new, and outside of the kitchen cabinets and lighting being outdated, the property doesn't have any issues).  The property is in a highly-desirable neighborhood, the rents average around $2,300, and the home has been well maintained.  I'm seeing no red flags, and thinking that maybe this is just my (first) deal to have.

Thanks again for your insight, Steve.  I was instructed that the buyer's 15% profit ($64,650) lies in the 30% that was deducted (the $129,300), and that the remaining 15% goes to holding (6%), realtor commission (6%), and closing (3%).  I would think that if there is little to no rehab costs that the buyer could then flip the property at, or close to, the FMV and that he/she would be happy that I brought him/her this deal.  Let's say I miraculously got the property for $262,865 and took a $10,000 assignment instead.  Wouldn't the buyer price then be $272,865?  And then, if the rehab came to only $10,000, isn't the buyer really making a profit of $74,650?  Wouldn't a rehabber be happy with this deal?  Seems like a win-win, but this is where my confusion lies -- in running the numbers!  

I figured that if $20k wasn't needed for rehab that I would pass most of that amount over to my buyer, and of course I would also make a higher assignment fee.

 Yikes! Is there another formula that I should be using if minimal to no rehab will be required?

 Thank you, Steve!  Actually, I was also taught what you were, so why I deviated from that is lost on even me!  I will make my first offer at $262,865.

Hello BP Community!

I would appreciate any input out there regarding whether or not I should try to get a property under contract.  This would be my first attempt at doing so as a Wholesaler.

PROPERTY: 4/3, 3,621sf, $431k ARV (asking price $330k), light rehab (if any at all) $20k

MY CALCULATIONS:

$431,000 - $129,300 (30%) - $20,000 (Rehab) = $281,700 (investor price)

$281,700 - $5,000 (assignment fee) = $276,700 (MAO)

I plan on making my first offer $270,000 to give me some negotiating room.

Please let me know if my train of though and my numbers are what they should, or shouldn't, be.

Many thanks!