All Forum Posts by: Troy Michaels

Great question...

What I didn't explain is that the 40% that was taken off the top of your ARV represented the following...

Costing costs in both directions
Holding costs
Soft costs (insurance, utilities, etc.)
The investors PROFIT.

What I also didn't talk about is the approach if you are wholesaing a deal to a landlord. The approach would be different.

You can get absentee lists straight from Realquest. Sign up for the county you want to purchase in and you'll get a ton of leads included with the package.

Additionally, you can use Realquest to find investor buyers for the property if you decide to assign the contract.

This is how we wholesale in other areas that are 2 hours or more from our hometown area.

Troy... one way that I teach my clients is the 70% rule... only I recommend they use 60%.

Let me explain...

Somewhere along the line a guru, I don't know who, was teaching that the best way to determine your offer price was to take 70% of the After Repair Value (for a disucssion of determining ARV I posted a blog last Sunday related to the subject) and the subtract the repair estimate from that 70% and that would be your offer price. For a wholesaler, you just have to add in your wholesale fee on top of the repair estimate.

Lets look how that works using real numbers and 60% instead of 70% because the market is still shaky.

For discuss sake ;lets say that the ARV was $100K... 60% X $100K equals $60K.

If your repair costs are $15K you would subtract them from the $60K to arrive at an offer price of $45K.

Now you subtract your wholesale from the $45K to arrive at your offer price.

I hope this was helpful?

You would do it just like you would if you lived in the area. You would market to them like normal and then just handle everything via phone, fax, and email.

Brian Haskins

Different title companies/agents deal with it differently.

I've had some title agents who require nothing from me and tell me I have to report it myself. Others do report it, but I don't think its a 1099, and its definitely not at closing. Calling the title agent/company that you will be dealing with is the best idea for that one.