I AM NEEW IN REAL ESTATE,I WANT TO WHOLESALE AND HAVE FOUND WHAT I THINK IS A GOOD DEAL.ITS A $25000 PRICE,$25000 IN REPAIRS, ARV IS $75000.IM NOT SURE HOW MUCH MY FEE SHOULD BE, PLUS FOR SOME REASON THE SELLER DONT FEEL RIGHT ABOUT DOING A ASSINGMENT CONTRACT. HE JUSY WANTS TO DEAL WITH ONE PERSON SO IF HE GOES UNDER CONTRACT WITH ME HE WANTS TO SIGN THE DEED TO ME,SO, IT LOOKS LIKE I WOULD HAVE TO HAVE 2 CLOSINGS, WOULD THAT NOT CUT IN TO MY PROFIT?ALSO, I LIVE IN NORTH CAROLINA AND I REALLY NEED INVESTORS I CAN GO TO WHEN I FIND DEALS IF YOU COULD PLEASE HELP SEND ME IN RIGHT DIRECTION.THANK YOU. NEED HELP FAST ON BOTH.AND, IF A HOME HAS A $100000,WHAT IS THE MOST I SHOULD OFFER TO WHOLESALE OR ASSING THE HOUSE OVER TO INVESTOR IF I WANT TO MAKE 10000. IS THAT A GOOD FEE ON THAT MUCH MONEY I REALLY DONT KNOW HOW MUCH MARGIN THERE HAS TO BE TO MAKE 5 TO $10000 A DEAL.
Please NOTE: Typing a post in ALL-CAPS is considered rude online, and is EXTREMELY DIFFICULT to read. I couldn't read your entire post, so I can't respond properly to it.
I'm sure that you were not aware . . .
I hope that others can make it through the post as to give you some assistance in your needs. It may help others to repost your article without writing in CAPS.
Agree with Josh, capitalization, puncuation and paragraph breaks make for an easy to read, and ANSWER post.
But here goes.
$25K purchase and $25K repairs (assuming you estimated correctly-but probably low) with a selling price or ARV of $75K is right in the power curve. Get this unit under contract now.
The problem with the two closings is that it may negate the end buyer's ability to get a loan. Although if you search the archives here you'll probably find lots of ways around it. Cost of the second closing might not be a big issue, not sure of costs in your state.
If you need investors NOW in order to make this deal work you may have gotten the horse before the cart. Do you have the funds to buy and do the rehab? How about the funds just to buy?
Trying to make $10K on this deal may mean not making anything! I'd say $5K or maybe a bit less is right in line, but I'm not an authority.
As an example, if you had done your homework and had a knowledgeable partner you could get it under contract under your name and (as example) my name. If I look at the deal and like it there would only be one closing, in both our names, and afterward you would deed your interest over to me for your fee. Still only one closing.
The fact that a "typical" buyer has reservations about only dealing with YOU (who may have impressed him as a "less than knowledgeable" rookie) raises a lot of red flags. Does he assume that a knowledgeable buyer would realize right off that the repairs will run more than $25K? Or that the ARV is lower than $75?
Or more importantly DOES HE EVEN OWN THE HOUSE? Could be he's another wholesaler. Do you KNOW that he owns the house? The more I think about this the more likely this scenario seems.
If this guy is experienced, and you're not, he'll have your pants down before you even know your belt has been loosened.
For me this deal is very borderline.
If your numbers are correct, here is what it looks like.
ARV - $75,000
Purchase Price - $25,000
Repairs - $25,000
On a general basis, you want to get the property, the repairs, and your fee all for 70% of the ARV or less. In today's market though, I like to get it all at 60-65% or lower. Some rental buyers will go up to 80% though. For this instance let's just use 70%.
70% of $75,000 (the ARV) is $52,500
$25,000 is the purchase price and $25,000 for repairs equals $50,000. This leaves $2,500 left in the 70% formula for your fee.
This is not very much room to wiggle at all. If you use a double closing you will eat even further into the your profit with the costs of the closing costs.
Double closing doesn't change the fact that you are sending it to a new buyer. Your purpose in double closing then would be to mask what you are really doing.
I would just talk to the seller more about having to assign your contract.
Thanks for your input on my possible deal.Sorry for caps,I didnt know.This is my first try at a realestate deal.Still a little scared of getting in a mess.I am also still looking for a way to find investors in North Carolina so if you know of,or are investing there yourself,I sure would appreciate it if you would contact me.Again,thank you for your replys. neewone20
I live in Charlotte, NC and may be interested after my personal evaluation of the properties. Let me know were your located and maybe we can talk.