Market Value Properites

5 Replies

If a property is sold below market value let's say 20-30% below market value is it good deal in today's market ? And can it possible be wholesaled to an invester or so?

It depends on what you mean by 20-30% below market value. If you mean you can buy it for 20-30% less than it's currently worth in the condition it's in, then yes, that's likely a good deal, as you should be able to buy it and turn around and make 20-30% returns (minus commissions/fees, of course).

But, if you mean that the property is worth 20-30% less than what it would be worth if it were fixed up, then it depends on what it would cost to fix it and a bunch of other things. But, generally speaking, that probably wouldn't be a good deal if it required any non-trivial fix-up.

Rough numbers depending on market:

ARV-70%-Repairs-Wholesale Profit = what you need to get the property for. You will get a lot of "NOs" but these deals do happen and you can make it work with perserverence

So it is a better deal to get the property at 70% ARV rather than 20-30% below market value with little to no work on the property , depending on the market . So for example im in san diego down town area , would it still be good deal , I'm new so just getting information about this is well retained , because i have a realtor friend who sends me expired listings, since i just started in wholesaling real estate these are things that would help me alot . Thanks

Originally posted by @Isaac Kaai :
..i have a realtor friend who sends me expired listings, since i just started in wholesaling real estate these are things that would help me alot . Thanks

Keep in mind that if something was listed on the MLS, the list price is not market value. The market value is what someone would be willing to pay, and since it wasn't sold, that means that any offer that was made by a buyer and not accepted by the seller was also above market value.

So, not only do you need to get the seller to accept an offer lower than any other offer they received, but you are trying to get the seller to accept an offer 20-30% below THAT. Possible, but not easy to do.

Buying wholesale deals off the MLS is likely not going to be your most fruitful method of acquiring properties for that reason...

@Isaac Kaai I agree with @J Scott . MLS deals, if they are truly a deal will be picked up by the experienced investors and the agents they work with that are constantly getting MLS updates within a few hours.

Looking for other ways to find a deal will be much more fruitful - direct mail, bandit signs, driving for dollars. Do searches on BP for those topics and you will find a lot of good free info to get started.

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