What is the best price range to find the most wholesale deals?

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Account Closed · Answer

@Zach Jackovich

Good luck on closing your first deal sometime soon. Good on you for reaching out and getting started on real estate early!

To answer your question, you have to know your market. In Austin right now, I'd say our sweet spot is somewhere between $180k-$250k to acquire properties. But, if I were to drive an hour North or South, I could find properties from $30k-$50k pretty easily. If you have MLS access cross reference that with reliable real estate data (news articles, studies, government agencies) to find where the hot areas are.

I'd say it all comes down to knowing your market and your audience. Once you have that figured out, you'll do great! Good luck!

James Green · Answer

@Zach Jackovich, I tend to be pedantic, when I'm asked questions, so let me try to get past that and answer the spirit of your question.

First there is no "one place" to look for a deal. As the saying goes, Real Estate is location, location, location. What is an "ideal" wholesale deal to one investor, may not be for another. Let's start with the wholesaler's rule of thumb of the 65% or 70% rule. Meaning if you can find a property for 65% of ARV - repair costs - your fee, then this would "ideally" be a great wholesale deal to a rehabber. Problem with that rule is that the property maybe so undesirable (for many reasons, not just aesthetic) that you couldn't give the property away even if  you yourself inherited it. Try selling a house to rehabber that is next to a major highway & there are no other houses around nor major businesses.

Second, you have to know what YOUR BUYER'S WANT! I have buyers that will purchase a property for as much as 80% of ARV. I have others that the price doesn't matter as long as at the end of the day they can clear 30K+ and no less. Landlord buyers operate on another general rule of thumb for the deal to be considered wholesale for them. BUT WAIT, I've only been referring to SFR properties. What if you have apartment buyers (5 units +), then you are talking about a totally different set of rules to know.

Your questions:

1)"...what price range (or location) do you find the most homes" - There is no such animal, based on my explanation above. I don't know what market you are in? Different markets = different price range, different asset classes = different price ranges, Different side of town in the same market = different price ranges, different buyers = different price ranges.

2) "what type of properties do you find the most deals?" - Again that's not a question that has a true answer. In every asset class there are TONS of deals. You just have to pick the asset you want to master. There are tons of single family deals, multifamily deals, vacant land deals, NPN deals, tax lein deals, tax deed deals, hotel deals, mobile home deals, mobile park deals, ..... etc. Every class of real estate can be "wholesaled".

3) "I believe SFH are the most common wholesale opportunities but I just wanted to ask and see what others say." - SFH is without a doubt the most visible and talked about opportunities, but that's because of TV and "gurus". Granted there are more SFHs than anything else, but again you can wholesale all types of real estate transactions. But to give you an answer, if you are going to start in wholesaling real estate, wholesaling SFHs are probably the least difficult to understand and to begin.

Disclaimer -  I DO NOT BELIEVE WHOLESALING IS IDEALLY FOR THE BEGINNER!! Even though that is what I do on a PT basis. DON'T BELIEVE THE HYPE. Buying a rental is SO, SO MUCH EASIER & SIMPLER!

James Green · Answer

@Zach Jackovich that's a very general question & also ambiguous.  Price depends on location & condition of property to comparable properties. Also your exit strategy, ie) are you a rehabber, Landlord, etc. What's wholesale/discount to a landlord is different from a rehabber. Also what type of property- SFR, mobile home, townhouse, apartment, rowhouse, office building, land, etc

Zach Jackovich · Answer

@James Green I really appreciate the detail of that response, and that helps clear up ALOT! Sorry about getting back to you so late, I'm a full time engineering student and sometimes school takes priority! But Thank you again!! Much appreciated

What is the best price range to find the most wholesale deals?

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