Would this be a good wholesale property?

8 Replies

I am just trying to identify good wholesale opportunities, as I'm new at this. 

I found a property in San Antonio, Texas

So far, these are the statistics:

Appraised: 72 k 

Improvements: 61,620 k

Land market: 10,380 

The way I understand to check on whether or not this is a good deal (I have not gone out to see the property nor have I spoken with anybody) is the following:

20% Higher than the appraised value; thus: (72k x 0.20) = 14,400 then I add this value to the original number, thus 72 k + 14,400k = $86400 k 

Then I would subtract 30% of this value ; so 86400 - 25920 = $60480

The last step would be to subtract the improvements; thus in this case our improvements cost more than the value I received...so this wouldn't be a good deal where there is any money to be made. 

Is my thinking correct? Help! 

BTW, I'm using BCAD.ORG as the website I'm getting property info from.

The county appraisal values don't matter

Figure out it's ARV based on comps in the area. Similar houses/ sizes/ near by and what they have sold for.

Subtract from that the amount of repairs this house will need to get it to similar selling condition, selling costs, holding costs, your assignment fee, and the minimum profit a flipper would require on it. 

The number after after all that is your maximum offer. 

If they take that offer ...then there's a deal. If not- there's not. Your current information doesn't tell you if this is a potential deal. 

Originally posted by @Natalie Kolodij :

The county appraisal values don't matter

Figure out it's ARV based on comps in the area. Similar houses/ sizes/ near by and what they have sold for.

Subtract from that the amount of repairs this house will need to get it to similar selling condition, selling costs, holding costs, your assignment fee, and the minimum profit a flipper would require on it. 

The number after after all that is your maximum offer. 

If they take that offer ...then there's a deal. If not- there's not. Your current information doesn't tell you if this is a potential deal. 

Thank you Natalie for your help, I appreciate it. Do you recommend any resource for finding comps especially considering that I am not a real estate agent and do not have access to the MLS. I'm not sure if there is a general site to use, or what resource is best.

And another question, I can do some calculations first determine if there is a deal before I even give the potential seller a call, correct? Meaning, I can use the information to decide whether it's worth pursuing before I even go to a location physically and check for pricing costs for renovations, etc.? 

Thanks! 

Go to the "spousesflippinghouses" website and sign up. They send you a video on comping property like an appraiser without MLS access. It is free and great info for a beginner. I do recommend you start networking and befriending a few realtors. They will be key to success. ( I am not a realtor)

If you still need help please reach out. I am always willing to help. I know the SA market pretty well.

Good luck

@Mohammad Haidarasl yes, you would want to run the numbers before you present it to a buyer. You want to know comps, ARV, and renovation costs. You will need to see the property at some point so soon than later is best. Sure you can run comps first based on asking price to see if they are even in the ballpark but without knowing what it needs in renovation cost you won't be able to evaluate it much further. also this gives you a negotiation tool if you know how much the rehab will cost, you can tell the seller why your offer is lower than their asking price

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Hello @Mohammad Haidarasl
Reach out to me and I'll sit down and show you how to run comps. It's not something that can be explained here. But knowing what the right exit strategy and the right buyer for this house is very important.

I recommend pursuing all of your leads when you're starting out.  Walk as many houses as you can and try to figure out what you need to offer, it's the only way to really learn how to do it right!

@Mohammad Haidarasl , I'm curious as to WHY you would start with: "20% Higher than the appraised value"? Where did that suggestion come from?

How about instead, starting with: "20% LOWER than the appraised value"?

The important question is: who's doing the appraising? (Hint: your Lender's appraisal matters).

Anyway, others seem to have set you straight. It's always good to ask. Cheers...

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