I've always been a full-rehab guy, never done a wholetail deal..but this came across my desk over the past few days:
Purchase price: $98,500
Retail value (in as-is condition): $125,000
ARV with medium rehab (base finishes): $140,000
I'm thinking I'll close, do about $1k in basic make ready repairs and put back on the market targeting the $125K price point and call it a day.
With this strategy, I see no way around paying realtor fees and potentially some closing costs (this neighborhood is heavy towards first time buyers). Is that typical for those who do a lot of wholetailing? Am I missing something?
You don't have to pay the full 6% realtor fee. You can flat-fee list the property on he MLS. I have worked with some companies/realtors who will do that for as little as $100.
But you will still typically have to pay the 3% to the buyers agent. Along with some closing costs. Although everything is negotiable.
@Thomas Fortune how did that work out for you? I want to add wholetailing as a strategy to my business. Please provide update.
I'd like to know the outcome too:-)
For what it's worth - I put a great deal of thought into this, and here's my conclusion on wholetailing (for me and my market): If I want fast turnaround..
There's no way around paying 3% to a buyers agent.
Yes, i could flat fee list it, but having done a separate deal recently in which things went sideways prior to closing, i'm reminded of how important it is to have a great agent on your side (and how important it is to pay your agent appropriately). I have a solid agent that I pay 2% on the sell side.
There's also no way around paying buyer closing costs - in my market, and for this particular house, paying $3k-$5k in buyer assistance is something I've got to do.
So at the end of the day, i still need to budget for roughly 10% of the sales price in closing costs regardless of it's a retail flip or wholetail deal. These are simply the costs of doing business, and need to be budgeted in for this type of strategy.
hope that helps!!
@Thomas Fortune Thanks!!
@Dom Allen Curious to know if you ever implemented wholetailing into your business strategy?
@Rotimi Lademo no I haven't yet
@Dom Allen what are your thoughts on the strategy as a whole? I'd love to know what you think since I'm considering if I should pursue it.
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