To wholesale or to not wholesale? Help BP!

5 Replies

I currently have a property under contract and need some advice. The property at hand is a friend's that I've agreed to help get rid of. Any profits from the deal will be a JV contract. I have the contract for 70k and I believe that's even a tiny bit high (that's what he needs) for a seasoned investor. The ARV for the property with all the bells and whistles is probably only 215k. The more I think on the deal, the more I think it's appealing to a control and hold landlord because of the high rent in the area. The house is currently a shell but turned into a 2br 2 bath and could easily rent for 1800. Now, the real pickle is I've been considering keeping it but I currently don't have the liquid/income to even support the 70k loan. I'm 99% sure he'd owner finance for 6 months until I can figure it out. I have also considered hard money and flipping to retail myself, but I think with the ARV only at 215k and it needing 100k, the numbers don't really work. I'd like to have him owner finance and slowly build it up, maybe not as nice as retail, and put renters in it. I guess I just need a WWBP do-haha.

Originally posted by @Randy Coffren :

I currently have a property under contract and need some advice. The property at hand is a friend's that I've agreed to help get rid of. Any profits from the deal will be a JV contract. I have the contract for 70k and I believe that's even a tiny bit high (that's what he needs) for a seasoned investor. The ARV for the property with all the bells and whistles is probably only 215k. The more I think on the deal, the more I think it's appealing to a control and hold landlord because of the high rent in the area. The house is currently a shell but turned into a 2br 2 bath and could easily rent for 1800. Now, the real pickle is I've been considering keeping it but I currently don't have the liquid/income to even support the 70k loan. I'm 99% sure he'd owner finance for 6 months until I can figure it out. I have also considered hard money and flipping to retail myself, but I think with the ARV only at 215k and it needing 100k, the numbers don't really work. I'd like to have him owner finance and slowly build it up, maybe not as nice as retail, and put renters in it. I guess I just need a WWBP do-haha.

Sounds like a good flip deal to me, the property ARV is 215k, its under contract for 70k, you say the repairs will be around 100k, so that still leaves great equity on it. You might get lucky if you have a fix and flip buyer interested. I would put up the deal on craigslist to pull in some cash buyers. Could potentially sell it for around 100k, giving you 30k profit to split. As of selling it to a buy and hold investor, i dont think they would be interested in damages that high, if the damages were less then 1800 rent would be great for them.

@Randy Coffren I'm going to disagree with @Dan Losh on this one. 70+100 = 170

215-170 = 45k

You have to factor in taxes insurance closing costs and realtor fees.

Closing = 6,500
Realtors = 13,000

That equals 18,500

45-18,500 = 26,500

That doesn't even include taxes insurance and if you owner finance you are paying a monthly payment. And if the project is 100k that's more than likely a 4-6 month project leaving you with around 10-15 thousand in profi. Too thin of a margin for me

true, I didn't think about the fact that it will be sold by a realtor. In that case devan is correct.

Yep. Thanks for the imput guys, I've got some thinking to do.

I agree with Devan.  Seems like wholesaling is the way to go.  Leave the 'fix' headache to someone else, unless you're a GC and could really get in there and do a nice job inexpensively.  Sounds like a project that is not for the 'faint of heart.'  I like the 'as is' approach.

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