Wholesale Deal Structure

3 Replies

Good evening BP,

I have a question,
If I can get a seller to take 60% or less of the ARV and also subtract repairs, is it possible as an incentive to get the seller to accept the offer that I tell the seller after the home sells I will split the profits with him in exchange for him taking a low price?

Example, ARV is 100k, 10k in repairs, I offer $40,000 to close in two weeks. Fix up the property and I'm all in the deal for $55,000. Sell the house for $100,000. 45k in profit, give the seller $22,500 after I sell the property months later.

Is that possible? I'm thinking it is and just wondering how to structure it. I've never heard anyone mention this as a strategy to close more deals but it seems to be a great way to get sellers to take less on a wholesale deal.

It is certainly possible.  

But it would be better to talk to the seller to find out what their needs are.  Then make two offers to the seller

Offer 1 $40,000 close in 2 weeks.

Offer 2 - $2,000 now then$40,000 + 50% of the net net profit after the house is fixed up then sold.

I would skip offer 2 and make this offer instead

offer 3 - $2,000 now and $50,000 after the house is fixed up and sold.  It would be written up as a single payment note to be paid when the house resold or within 1 year, which ever comes first.  No payments.  No interest  Close at a title company.  They will create the paperwork

My first rehab, in 1995 or 1996, I made two offers like offer 1 and offer 3.   The seller picked offer 3.  It freed up a lot of cash to get the rehab done.  No payments and no interest was icing on the cake.

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Thats a great offer,
From my perspective, so I'm assuming my private lender would okay this and just give me the cash to do the rehab? Doesn't this mean the seller needs to sell me his entire house for $2,000 for me to get the deed to be able to start working on it? I don't know of anyone who would suggest rehabbing a property until you have full ownership? Can you walk through the steps on this one? How would I take ownership of the property with just giving the seller $2,000 up front? Thanks.

Would like to hear a the steps on the offer also

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