Philadelphia, PA · Member since 2018 · 4 posts · 0 votes
Hi my name is Aaron Clarke and I'm a new wholesaler in the Philadelphia market. Im excited to start and eager for the opportunities that will come. Right now I'm just looking to have relationships with investors and I just know how to go about doing that. I don't have a lot of experience and want to learn more, so I would really appreciate the help and advice. Thank you.
Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
8y
Welcome to BP! They usually say in wholesaling to find a deal and you will easily find a buyer. Too many wholesalers spend more time building a buyers list than finding deals.
Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
8y
Welcome to BP! They usually say in wholesaling to find a deal and you will easily find a buyer. Too many wholesalers spend more time building a buyers list than finding deals.
Philadelphia, PA · Member since 2018 · 4 posts · 0 votes
8y
Thank you for taking the time, it is very appreciated. I just have a follow up question. I know where to find deals, but how can I tell a good deal from a bad one?
Thank you for taking the time, it is very appreciated. I just have a follow up question. I know where to find deals, but how can I tell a good deal from a bad one?
Most flippers will want to pay no more than 70% of ARV-expenses. First step is look at comparable properties that are in prime condition and see what they sell for. That is ARV (after rehab value). Then calculate how much money needs to be spent to rehab to prime condition. Subtract rehab costs from ARV, then multiple times 70%. That is the price you can wholesale for, so you need to offer lower than that for your cut of the deal. There are books and spreadsheet tools to help with calculating rehab costs. When starting out you probably want to give yourself a better margin in case you make mistakes.
Maybe some flipper or a wholesaler will drop on the thread with more advice to get you going. Good luck.
Flipper/Rehabber · Wilton, CT · Member since 2015 · 4k+ posts · 4k+ votes
8y
OK OK ok
WHY do I keep hearing this? Flippers will pay no more than 70%. Where did this come from? WHY 70? Why not 68.5%
Things like this is kryptonite to a scientist/engineer/smart person.
What the heck!!
Really... this makes absolutely no sense.. at all!
You know how much flippers REALLY do not pay more than?
Want to know that ACTUAL real number? I will tell you.
That magic number X is... how EVER much the numbers (this includes ARV, market value, and the amount of risk you want to take) allows. THERE!!
THAT is the magic number.
Imagine you have wreck. small tiny little shack in the most expensive area of the state. ARV is 100% because it is small... but hey you put an addition above the garage, and suddenly you have the right square footage to match all the 600K houses being sold. The addition is cost 50K.
OK so you are going to offer them 70K because that is 70% of the ARV.
Great.
I will offer him 120K, I will dump 50K into it, I am in it for 170K, I sell it for 580K and I make 3 dollars! 3 Whole dollars!!
First off, great job at just really being vulnerable and asking for advice. I started out by just researching the questions I needed answers to in the search box. 9/10 times I found the answers I was looking for. The only bad thing about that was that I was still in the dark and not really building relationships. So cheers to you!
My humble "three-year experience" advise to you is really just get out there. Meet up with as many real estate investors as possible and ask them how you can help them. You can honestly use Zillow, Redfin, Realtor.com, etc to pull your numbers and comps. We work with a realtor on all our flips and by just using the online free websites, our numbers are always in the ballpark of what our realtor is saying the ARV of the property is. The most important advice I would give is just DO. BE ACTIVE. Do not be afraid of NOs or people finding out you're new to the game. Continue being honest, vulnerable and be willing to learn. Ask people out for coffee. Hear their story and listen to see where you can add value to them or their business. Three years ago, I didn't even know what equity meant. Three years later, we are buying and flipping and wholesaling and renovating and etc.... The three years ago "me" would've had a hard time believing my reality now if I told him. Just keep reminding yourself that everybody started out NOT KNOWING ANYTHING ABOUT REAL ESTATE. Your goal is to grow incrementally every day.