Wholesale Fee Vs. Trade Through

[Jason Dillard]

Let's compare a simple wholesaler's deal to to the same deal as an exchangor: ARV is 200k, Repairs are 30k, As is value 150k, Purchase price is 70% of ARV minus repairs and 10k assignment fee so 100k. Wholesaler assigns contact and makes 10k..love it. Exchangor has same house worth 150k(as is value) that he/she owes 100k(contract price). The 100k is due at close. The exchangor brain thinks, "What should I do with my 50k in equity?" The answer is: anything that will close and payoff the 100k debt in next month. So exchangor calls up a flipper and offers the 50k equity for one of the flippers double wides with land at a discount to 40k. The exchangor remembered from the last marketing session that the flipper has a free and clear double wide worth 40k rented for 700 a month. (Flipper probably picked it up for 20k couple years ago and he was complaining about management too). So flipper thinks 100k and his double wide is not a bad deal for him. Flipper took house, flipped it, made money, and got off the headache management. Result for exchangor is a free and clear double wide worth 40k that is making 350 a month net..love it more. What's exchangor thinking? "What should I do to improve my position with my 40k in equity that has income with out a time constrant?"............... Who made more? If you need cash to eat... wholesaler made right choice. If you are building wealth, then exchangor made 4 times as much. Questions?

[Jay Hinrichs]

Originally posted by @Jason Dillard:

@Jay Hinrichs Plug in any 40k equity for the trailer. Could be the 40k equity and 60k cash to buy a 100k property. It still gets the wholesaler more equity in the next property. In this example, he paid the 10k fee he gave up plus 60k cash, so 70k, for a 100k property. A really good exchangor seeks that value add 100k property. Then he fixes the problem. Then trades through at 125k into another. BTW, SC has more mobile homes per person than any other State. We number 1.

 I get it.. I spend a ton of time in Charleston and bought one park that I demo'd and built new construction on.. just a lot of moving pieces to make these things work this way.. and I guess if you have the net work right then what the heck.

I don't work with wholesalers at all so not any thing I am interested in comparing.. to me its like the used car side of real estate.. no time for it or desire to engage those folks.