5 Replies

I am new to REI, but I am looking to get into a few wholesale deals. I have a good basic knowledge of the topic, but I don't feel educated enough to actually do a deal at this point. I would like to partner up on a deal, or partner up for a deeper understanding of the process if anyone is willing. What are a few key points to look for in a "good deal"?

Hey Ryan this is a really good question as i have some knowledge. I am not completely sure on the whole process or how i would know what a gd deal entails

@Ryan Phillips

welcome to the BP Nation. I think one of the best ways for you to find out what you need for a "good deal" is to network with the buyers in your area, via Meetups or REIAs where you are. For wholesaling, you have your "gold standard" of ARV times 70% less repairs less your fee for the max number you can offer but I'm learning quickly that knowing what your buyers want and also how they go about with their business is essential. For example, I know a successful investor who has partnered with someone who can do quality new construction for less than other builders. This allows me to look at a potential deal that may not hold up numbers-wise for other buyers who cannot build as inexpensively (relatively) as a potential deal for this particular investor.

@Christina R.

Thanks for the response Christina, I have been looking for REIA meetings here, having some trouble but will dig deeper into that. What is a good way/formula to figure an accurate ARV value?


@Ryan Phillips - for calculating the ARV probably THE most accurate way is to have access to the MLS - either via yourself if you are a real estate agent or by hooking up with an agent in some fashion (family member an agent? Agent willing to run comps for you? etc). This is because you can get SOLD data on like properties by running it through various filters (location to target, age, size, bedrooms/bathrooms, year built, upgrades (or not), etc).

HOWEVER, if you don't have access to the MLS - you can determine ARV with a fairly solid degree of accuracy by drilling down to your target farm area and studying comps - both listed currently and sold - on Zillow, Redfin, and maybe some regional sites. We have one here in our area that gives pretty broad information. What I've done is I've sent up Zillow searches and some regional searches for my target zip codes and I get notifications when something hits the market and when something closes. After just reading through these emails for several months and driving around these target zips during my spare time to get more familiar with street names, etc., I have an instant "feel" for whether that MLS list price is market price, or if it's below and whether its a SFH or a townhome, etc. If it's out of the norm, I know to research further by actually opening up the email and looking at the listing.

Once you have ARV - and I would suggest you always lean to the conservative side of that number - you then can take 70% of that for holding and costs and subtract out your estimated repair value and your fee to get what you - as a wholesaler - would attempt to get the property under contract for. If you don't factor in a fee you are hopefully going to be able to partner on the deal and get your $ on the back end (which is a great way to get into this business with not a lot of money or experience but it takes time and trust to cultivate these type of relationships - hence, again, try to find a Meetup and/or REIA in your group where you can start networking).

@Christina R.

Thanks so much for that, very helpful! I guess my next step would be to get access to the MLS and do some studying there. Thanks a lot!

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