Toronto, Ontario · Member since 2014 · 25 posts · 2 votes
I am a FL Wholesaler
I just recently partnered with a Note Buyer/ REO bulk contract holder.
They sent me 4 deals, with addresses and zip codes. They state that they are 42% FMV or Offer from the Buyer. However, they did not provide me with any comparables, photos, rehab costs (as the properties are vacant REO's) and just simply said show them to my partner buyers.
What does this mean exactly for me? How will the Buyer properly assess this situation?
If you're a wholesaler you should be the one assessing the property for it's market value, comps and rehab costs do determine if they are good deals or not. You don't really want to rely too much on the numers that they're giving you. If they're good enough deals you should be comfortable enough to put them under contract and market them to your buyers including your fee.
FMV is the price a buyer would agree to buy and seller would agree to sell... for a specific property. The buyer and seller would be free of undue influence or duress. The transaction would be at 'arms length'. The circumstances of the hypothetical sale would contain provisions of a 'typical' financed transaction using underwriting standards from accepted and conventional sources. That's my definition.
BTW, most asset managers, REO disposition managers, trustees, etc., have a different definition than a retail, owner-occupied, GSE financed property buyer.
As a wholesaler you need to do your due diligence and research the area and the comps for that area. You should also visit the properties especially if you're not sure of the neighborhood. The condition of the property is also a factor that determines what your offer should be and the max you can pay for the properties. If you are trying to purchase from a wholesaler, it would make sense that they would offer you the details of the property such as comparables, photos, & rehab costs. But if not, this would be your job.