My first cash buyer.

[Michael Glorioso]

I am a new whole seller and I met with my first cash buyer today. When I asked him what he wants his percentage profit to be, on average, he said he would like to see 20% of the ARV. Is this a reasonable amount and will it be possible to find deals to meet his criteria? Thank you for all replies!

[Bill Jacobsen]

My profit margin is 20% of cost of project, not ARV. I do have a 20% cushion on my rehab cost. For instance, if I can buy for $50,000 and rehab is $10,000 I will count rehab as $12,000. My cost becomes $50,000 + 12,000 + holding costs(ie,$3,400) for a total of $65,400. I then want profit of $13,080.

Hope that helps.

Bill