Hello to you all,
Quick intro, I'm Geoff a fairly new wholesaler/investor here in Charlotte NC, crossing over from the entertainment field. I have a deal I would like my fellow BP folks to help me with.
ARV = 300k
Repairs - 30k
If I go with the normal wholesaler formula.
300k X .65 = 195k my offer
Assign to buyer
300 X .70 = 210k
Assignment fee for me - 15k
Which is awesome but for the buyer if he is at 210k + 30k repairs + 10k closing and fees = 250k
That's a nice 50 grand to my buyer. Bare with me here this is my first deal of this amount. I haven't given my offer yet.
Question - Am I leaving too much equity on the table? Should I increase my fee?
I would like to leverage everyone's profit. Not be greedy
Seller is looking to move out the country in 2 years but wants to hear my offer. Don't no if that's motivated or not.
Will it be offensive to ask for 195k where the seller who doesn't no the comps may be offended for his 300k home that he thinks just need minor repairs. Smh
Your ideas and point of views on how you would approach this deal would be appreciated.
In your "Rehabber formula" the $30k gets subtracted from the ARV*70%, so a Rehabber using this formula would pay $180k. The Rehabber has a lot more than $10k in closing twice, holding costs, interest, commissions, etc.
Wow your right, I apologize my excitement had me all over the place lol. Thanks for clearing that up. So if were at 180k for rehabber I would be at a asking price 65% = 165k
The Seller started by saying his home is valued 350-400k. The comps showed me something weird. One house to the left sold for 200k (a bit smaller) and One house on the right sold for 345k (a bit bigger and wet bar). And a much bigger one on the same street with a Realtor For Sale sign selling for 377k (been on the market for 60 days now
So if a smaller home that needed more work sold for 200k justifying my 165k max offer may not go over to well without insulting the seller.
I have made some great negotiations happen but this one will bring out the best in me, I look forward to the challenge. I need more ammunition I will rather make my offer after a tour thru the home and really assessing costs much deeper. I do wish I could of came up with an offer on the fly while I had the seller motivated Smh. Oh well I plan to keep learning and gaining ongoing knowledge from the help of you and others here on BP.
Hey there @Geoffrey F. I'm here in charlotte I'm may be able help ... I would suggest that if 30k is the rehab needed be surre u have bids to back that number up when pitching the deal if u are unsure of the rehab cost
Thanks that makes a lot of sense. I will consider doing that after I speak to seller and equate his motivation.
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