First Wholesale Buy Deal Feedback ASAP Please
Hello, I have successfully connected with a wholesaler. They have found me a property in the Lakewood, CO 80232 zip code.
Current Details
1963 Brick Ranch Single Family 992 sqft/3 bd/1 bath 1 car garage. There is 992 sqft in the unfinished basement to add an additional bathroom and 2 more bedrooms.
We will need to clear the hoard of belongings left behind from the entire home before the demo and rehab can begin. The front lawn has no grass. The previous owner has zero-scaped the entire front lawn.
The wholesaler has calculated the ARV at 570K and stated needs only a $60K cosmetic renovation to get it to that ARV
I estimate that it will take 74K in rehab and used that higher number and estimated the ARV to be 560k to account for a further decline in prices over the next few months.
Questions
This wholesaler has sent me 2 other homes that I hesitated on because I felt they were overpriced after I ran them through the Fix and Flip calculator. The wholesaler told me that the homes were both bought by other investors for full asking price. Now I'm questioning if I'm turning down good deals because I'm being overly cautious and overestimating costs and underestimating potential profits. I'd really like some help from the community.
They are asking $389K and the report shows that I would need to buy at max 310,600 to make a 20% profit if I can sell the home for $560K.
Am I going about this all wrong? All feedback is welcomed. I will be walking the home today at 12PM MST and they are going to want me to make a quick decision and I want to be as prepared as possible. FYI, I will have a contractor with me but in general, is my line of thinking wrong since other investors are picking these properties up in less than 12 hours of my being notified that the properties are available for off-market purchase?
*This link comes directly from our calculators, based on information input by the member who posted.