All Forum Posts by: Marcelsio Woods

@Abigail Hollar Thank you for that correction. Your right.

Thank you Mr. Fitts.  That reassures me that I'm on the right path and I'm understanding it alot better than I was at first.  I appreciate your input and help.  May God continue to bless you

I have a scenario that I could use anyone's help with. I understand the ARV x 70% - repair formula, but.....here is my dilemma.

I found a house owned free and clear by the seller and he's asking 89k cash. The house is located in an excellent neighborhood, located near a school, near supermarkets and stores, near downtown.  The comps that I had pulled, were of houses that sold around the area about 3-5 blocks away because no houses have sold within the past 6-12 months and there are no renters in that neighborhood where the house is actually located, and those houses were sold for around 55-65k. The house doesn't need many if any repairs.

Now I know every sell is different, and when to use the 70% rule depends on the deal and the situation. So I plugged the numbers in and they are as follow:

ARV - 65,000 x .7 = 45,500 - repair (i.e. 5,000) = (offer) 40,500

(based off comps)                  

Now where I'm getting twisted up is, If I offer $40,500 for the house and let's say its accepted.  As a wholesaler, where would my profit figure in for setting up the deal. 

Do I subtract 5-10k off the offer for my assignment fee and get it under contract for 30-35k and advertise it for 40-45k?

Do I add 5-10k to the offer for my assignment fee and advertise it for 45-50k

Also, when I divide 40,500 by 65,000 it comes to 62%. Is that the ROI that the investor will make.? Would this be considered a "good deal" for a investor?

I just need some advice from more experienced people to know if I'm on the right track or not.  I'm giving my heart & soul to learn about real estate investing and get it right. Your input would be very much appreciated.

Thank you

I too am educating myself on wholesaling, getting all my information together before I jump out. I'm still a little shaky on the 70% rule, even though I know its just a general rule of thumb.

But good luck to you and I wish you nothing but success

I have read many of the post and have been amazed at the level positive feedback given from everyone's point of view from new to seasoned investors. I to am a newbie, but I think I have a firm grasp of what it takes to wholesale even though I haven't been able to sell my first home yet.  I'm still educating myself on every detail required to be successful in this sector of the business and not waste my time or anyone else's. 

 It's like someone said, If you offer people a bad deal disguised as a good deal knowing you're trying to get over on somebody, you WILL NOT last long.  Your name will leave a bad taste in peoples mouth. For what I've gathered so far your reputation can make/ break you in this game.  I personally am not into wasting anyone's time because of the time it takes to find deals and market them and find buyers, why play around with that?

@Eric Metz Thanks for the help and advice Mr. Metz.  Maybe when I get some experience under my wings, I said I want to eventually invest in Little Rock.  I lived there for 2 years and I have family there so I have a layout of the good and bad areas.  So maybe we could network and make some money together in the future.

Have a blessed day and continued success in your investing ventures

 Thank you again 

@Steve Roberts Thank you Mr. Roberts. I will.

@Matt McCarter Ok cool, good idea. Thanks again. I just joined BP yesterday and have already been receiving great feedback and ideas from plenty of experienced professionals. 

Thanks so much for your help

@Steve Roberts Thank you Mr. Roberts. I was actually thinking about that, but going that route I would eventually need a private lender/ hard money lender on my team to help the buyer out if they can't come up with all cash correct?  I'm in the process of locating private lenders in my area.  Now the hard money lender is another story, but I will get over this hurdle as well.

Thank you again for your input.  Have a blessed day

@Matt McCarter Thank you Mr. Carter. That information is helpful, but being that my area is not really small but small enough that we don't even have a REIA group around here, at the moment its been a struggle connecting with those types of groups. BP and REIclub.com are the closest so far, but I'm not going to let that stop me. I hadn't thought about craigslist but I do have ads ready to go for the local newspaper, local free buyer's guide and the area website.

As a matter of fact, speaking of networking events. I was asked to be on a committee for an area project under construction downtown.  I can pass out my business cards there and hopefully the lord can bless me with new contacts or someone in the real estate investing field. So I will take your advice.

Thank you once again for your help and input Mr. McCarter