Okay....so...I found a property that may be potential for wholesale or even fix n flip. I don't know if I am doing any of this right but I'm a newbie so If I sound like one please forgive me.
It's a single family 3.5 bedroom, 2.5 bath home.
Asking price is 232,000 (RIDICULOUS) I say that because the home needs TLC from top to bottom (a lot of cosmetic things).
New bathroom, new kitchen, update all floors throughout the house, landscaping
The owner does not live there, I believe he was relocated for his job. The house is being sold through a realtor and has been sitting on the market because the houses that currently sell at his asking price are already updated and upgrades and ready to move in.
So I know one of the rules is 70% of ARV.
Should I sent a letter to the owner? Do I have to go through the realtor since he's selling through one.
Thanks for all your input.
I sent you a Colleague Request, I'd be happy to help you out.
I have not found properties in that price range to be good rentals. The rent does not keep up with the price.
It could be a flip if bought at the right price. I like to buy at less than the average price in the area.
It sounds like he is using a realtor to sell his house. If I am using a realtor and receive a call, I just refer to my realtor.
Hope this helps.
There is no 70% rule. Some used to say:
(ARV - rehab cost) * .65-.70 = offer price.
But it still depends. I would stick with cheap houses.
@Sylvia Pomazak a few simple questions...
you say you "need help with the numbers"... but you didn't really give us the numbers.
Why is that price "ridiculous" is that ridiculously good or ridiculously bad?
To evaluate this deal you only need 3 numbers.
What is it worth in top shape?
How much cash will it take to get it there?
How much should you offer the seller/what will he take?
Just those three numbers and we can tell you what to do.
@Sylvia Pomazak I see you're a PRO member. If you want to know whether this deal would be a good fix or a possible wholesale deal then take advantage of the BP Real Estate Investment Calculators to analyze the deal. So what will you need for the calculator:
1. Sold comparables for the last 6 months within one mile of the property. If you have a realtor ask them to calculate the ARV. If you don't have a realtor use redfin
2. You'll need a renovation number for the calculators. You may want to try: Homewyse. I will tell you this. Whatever number you come up w/ will be wrong so put in a fudge factor. We have our own in house methods.
3. You'll need to know how you'll close the deal, Cash, Finance, What are the rates, terms.
4. You can estimate closing costs using 1st American Closing Cost Calculator. It will get you in the ball park.
5. There's other stuff that's required.
The numbers will set you free & provide you w/ the answer to the question of what you should offer or if you should make an offer to support either a wholesale or keep it for a flip strategy. Save the stamp, don't send the owner a letter. He's already listed it. Submit your offer thru your realtor. If the listing expires then send the owner a letter.
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