For areas where the median home price is over $400,000, how much profit do investors look for on deals when buying from wholesalers? I'm thinking like $50,000, right? I'm aware that closing costs and holding costs will also be much, much, much more expensive. I just want to know what to look for when I'm wholesaling on the west coast. Thanks!
Also, what percentage ARV when dealing with those high prices... 80%?
I would say every deal is different... however, like you said, when holding costs are $5k a month, a 20k margin wont get much interest. Also you have to realize that at the higher price, appraisals can swing WILDLY.on a 90k house, if it appraises 5% over or under, thats like 5 grand. on a 600k house, 5% is 30K! that can sink deals super fast.
If you lurk in the CA marketplace, you will see the constant theme of JOKE ARV's. Guys will find a marginal deal, that a local investor might look at... pull some questionable comps and go LOOK at this! California, ARV is HUUUUGE.. when in fact they are trying to pawn off an MLS deal as their own... lame.