Finally on BP (yea!). Now about the tools...?
OK, this is my first BP post so, hello everyone!
To start off I'm in St. Petersburg/Seminole Florida and want to get into wholesaling. I've had a single family rental before a while back but aside from my homes, that's the only real estate experience I have. After hearing about the BP podcasts, I finally decided to quit eating Doritos while watching Dancing with the Stars and take action! I've attended a local wholesaling seminar and hit a few of the REIA meetings (last TBREIA meeting had Tracy Caywood as a speaker which was very cool!). I'm a software engineer and QA Manager for a company here and bizarre as it was, when I really decided to go for wholesaling, a project we were trying to finish started going sideways big time. It had increasingly eaten up my time (clocked about 80+ hours last week) but we're finally wrapping things up so take that fate!
That's the 20,000 overview. Now the tools. They were the second reason I signed up for the pro membership (first was to hear more about Brandon's Hawaii trip...). It seems like everyone uses the 70% rule of thumb for wholesaling MAO:
MAO = (ARV x 70%) - buyer's profit - repair costs - wholesellers profit
So for scenario where the ARV is $100K, buyer wants $20K profit, $20K in repairs, and I want $5K profit the MAO works out to:
MAO = (100 * .7) - 20 - 20 - 5 = $25K
But using the wholesaling calculator it takes a straight approach of ARV - repairs & profits so it's MAO is $55K (discounting holding and other costs for this example).
Wet-behind the ears here so I'm just trying to get a handle on things and understand. Very much appreciate any input!
- Mike