OfflineTo some one that is new the wholesaling process can seem overwhelming at times. So many things need to be learned and set up. It can seem like so much.
I would like to simplify things and have you consider the basics. to be an effective wholesaler we must have buyer and we must have deals. those two things are what we do.
Every thing we do in our business should be geared towards these two things. All of our work should support these two basic concepts if we are to win at this game.
The next time you find yourself doing something in your business, ask yourself, "Does this support finding buyers or finding deals?" If not, you may not be being productive.
Keep working and good things will happen.
__________________
Roy Voeks
Official RE Coach
Hey thanks for posting this up!
My question is: while you are searching for deals how will you know if you found the right deal and the right buyer??????? Also, besides the marketing for potential buyers...is there anything else that may be completely new to do in terms of making sure that you are staying on task?
Thanks in advance!
Be blessed and enjoy your day!
~Blessed beyond measure and enjoying life to its fullest!~
Hi GentleL,
You know you are looking at the right deal for the right buyer if the deal fits the buyers criteria. Make sure you know your buyers first and their criteria in what they want before you go searching for deals. Once you find deal take a look at your buyers list and see whom it matches. Then cater the deal to them. To stay on track make sure you follow the direction of the program. Go in the order we suggest, that way you are on the right path.
Hope this helps,
Shah
It is not as simple as matching the buyer's criteria, however. You must also factor in your profit margin into the equation. Though it may be a good deal for your end buyer, if you cannot make a profit on the transaction then what is the point?
Here is a formula that a lot of active wholesalers are using to compute whether a house will be a good deal or not. The formula is solving for the After Repair Value (ARV) or what would be known as the market value if in good condition.
(ARV x 70%) - Rehab Costs = Wholesale Price
As the market rebounds and properties are being discounted less and less, the profit margin will shrink. In some markets the formula is already 80 or 85%.
Hi GentleL,
Take a look at Dean's Video Blog #245. Matt Larson gives a quick overview of the formula to use when you are calculating your price for a wholesale deal.
Stay focused
Hey this information really helps me understand this a little more better. Thank you all for explaining this to me. I will make sure to keep this in mind and refer to it when needed.
Stay blessed all!
~Blessed beyond measure and enjoying life to its fullest!~
Once the formula is figured out, how does one go about explaining to the seller that you may not be the one taking the property but u will be assigning the property? Seems like this would be difficult to do.
I assumed that the seller would have known this when the two first spoke. Like wouldn't we let them know that we have an investor/my friend "xyz" is interested in the home? This way they know someone has a true interest and the funds?
~Blessed beyond measure and enjoying life to its fullest!~
... for this reminder because you're so right. Busy work isn't necessarily being productive. At the end of the day I could have done absolutely nothing that actually mattered or got me any closer to creating a deal.
I am a new comer and wanted to know what the 70% is? Is this a basic markup for wholesaling?
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Here is a formula that a lot of active wholesalers are using to compute whether a house will be a good deal or not. The formula is solving for the After Repair Value (ARV) or what would be known as the market value if in good condition.
(ARV x 70%) - Rehab Costs = Wholesale Price
I totally agree with the formula above except that you also need to remember to subtract YOUR FEE from this amount! So, (ARV x 70%) - Rehab Costs - Your Fee = Your Top Offer
The 70% includes any costs that the buyer may have (holding costs such as insurance, utilities, realtor fees, etc and profit for them)
Karen
"You're never too old to be what you were meant to be!"
www.deangraziosi.com/real-estate-forums/investing-journals/59128/day-for...
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Erick D
You signed the PA with your name and "and or assigns" so if it is a private owned property, you can assign the contract and the seller doesn't need to know until it's done. They shouldn't care because nothing changes for them in terms of money.
If it is bank owned, you are going to double close, so again, that is between you and the end buyer, not the seller.
Julie Wakefield
John and Julie Wakefield
JCW Properties, LLC