New to wholesaling.
I'm very new to wholesaling and I'm looking for my first deal. I thought I found a good one but I'm now realizing that may not be the case.
I've got a lead on another home that's been completely remodeled and Seller is just looking to sale because they are out of state and no longer use the home. They have a tenant in place but tenant is closing on their own home and moving out.
Seller is asking $71k but willing to negotiate to around $55-57k cash if Buyer pays all closing cost. I spoke to seller last night and this is the information i was given about the home
Move in ready
Put down Brazilian cherry laminate floors
New AC unit
Hot water tank (big one)
Breaker box replaced and updated
Updated stove
Had water leak water leak is fixed but water damage
Tenant will be out by the 28th
Rent potential $750
Potential offer of $55k
Step grandfather built the home
Well maintenenced
White shed doesn't leak at all
Red barn fixer up
Garage doesn't leak. Needs to be fixed up
10 years owned
Decent backyard.
New toilet
Features of bathroom upgraded
It's in a decent area and to me it seems like it could be a good potential rental investment. My question is how do I know for sure if its a good deal or if the numbers will work?
I am trying to learn everything.
Hello @Alicia England - You will if it is a good deal or if the numbers will work by gathering the market data where the property is located.
Start by going to a site such as zillow.com or realtor.com and look at what similar properties have recently sold for. For example, if it is a 3 bed / 2 bath single family home in Chattanooga, Tennessee, then do a search for those types of properties. Narrow down to the same neighborhood or immediate area the property is located. Find properties of similar characteristics (square footage, garage, pool, fenced yard, etc.) and also look at when it was sold (3 months, 3 weeks, 3 months, 3 years?). Now you will know what a similar property has sold for and can get a feel for what you could sell your property for.
From there, it is a math equation working backwards from recent sales. Recent sales - your payout - real estate transaction costs - repairs = buyer price
Best of luck and keep me posted on how it goes!