Lafayette, LA · Member since 2017 · 2 posts · 0 votes
I have a property for sale by owner for $25,000
ARV= $70,000
2 beds 1 bath 1,150 sqft
I'm puzzled on what I should offer!
For potential wholesale deal in Lafayette,La area.
Help would be appreciated.
Wholetailer & Architect · San Francisco, CA · Member since 2015 · 544 posts · 298 votes
9y
What would you say it would take cost wise to get it to that ARV price? Is the owner willing to seller finance it? If so you can offer a little more.
Most people as a rule of thumb say 70% of ARV minus repairs is what you can offer. But every market and price point allows you to vary that a little
Stansbury Park, UT · Member since 2017 · 13 posts · 10 votes
9y
We offer full price, or higher in todays market for all our seller finance deals.
If this is a cash offer there are a lot of variables to consider...
1. location - determine if the property is in an area you should Rehab, Prehab, Wholesale or Avoid all together
2. Market - what are the comps in the area? Average sold price, average DOM (days on market), how many properties on the market right now.
3. Comp Condition - determine how much you'll need for repairs to match the market
4. Exit Strategy - What are you planning to do with the property? Flip, Buy & Hold, Wholesale
If you are wholesaling this you still want to know all this info so you can present it to your cash buyer. The more you have done your homework the easier it is to find a cash buyer. If you give a cash buyer a bad deal they won't buy from you again and they will spread the word. Show them that you the numbers and they will learn to trust you every time you bring them a new deal.
@Stevenson Adedayo I would need more info about the property and the seller, but if you make an offer of $25k, put $15k in repairs (just to get it rent ready) and sold it for $70K my numbers show you making $17,500 in profit.
That doesn't include your wholesale fee. Make sure you deduct that from the profit before you present it to your cash buyer.