HOW SHOULD I STRUCTURE WHOLESALE DEAL ?
i have a distressed owner in a decent area , and the arv of the property is 204k
with no fire or water damage .
what should i offer initially ?
at what price is the offer considered a "low ball" ?
Most Popular Reply
You should probably start by reading the wholesale forum. I am new myself but a good starting point is taking the ARV, in this case $204,000 x .70 = $142,800, then minus out your fee and the estimated cost of repairs. Let's say your fee is $5000 and repairs are $20,000. So as an example $204,000 x .70 = $142,800 - $20,000 = $122,800 - $5000 = $117,800. I have read that some will use a multiplier of .60 to .70 depending on the neighborhood they are trying to invest in. But more than that I think one of the most important things to learn are how to properly estimate repair costs. If you are way off on this it could kill a deal with an end buyer because there is not enough profit left for him/her when it is all said and done. Good luck.