Im a new wholesaler and get really frustrated when I use the formula/wholesale fee. My offer always seems to come way too low. Att least it appears that way to me. Ie.asking price-$150K
After repairs,wholesale fee, my offer would've been$ 49K.
It seems ridiculous. How can I get past my hesitancy to do deals and learn how to use the formula correctly? If IT'S correct.
Great morning @Sonya Brown . Welcome to BP!!
I am not sure what formula you are using. Can you elaborate a little more please? I interpret your original post as the property was listed for 150k but ARV is only 70k. Furthermore, there are several other fees/expenses that need to be accounted for besides repairs. What formula are you using?
Is this listed on MLS or off market? If it’s mls that’s probably not gonna fly. If it’s off market they’d need to be very motivated or it’s very distressed for them to sell at 49k
I apologized for not responding here,forgot I posted here. No, property is a FSBO. The formula is the one , I ve been told, to use for wholesaling properties:
ARV x either .70% or .65% minus wholesale fee
The ARV is 70k and they’re listing it for 150k? Or is the other way around? If the ARV is 70 and they’re offering 150 that won’t work at all and you need to move on.
If the ARV is 150 and assuming 30k in repairs you’d take 150*.7-30-minus whole sale fee
If you want a 5k fed then you have to get it for 70k or less
Yes, asking price $150K. I walked. Thank you.
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing