Whole sales: assigning

[Luis Saez]

In the BP podcast show 81 Michael Quarles was interviewed. And i loved it so much that I took closer look at whole selling vs my initial plan of doing buy and holds. It seems to me that i need to first set up a buyer data base. Get involved with an investor friendly title company. And then set up my marketing, and then start answering/screening calls to say the least I like the idea of getting a property under contract that is assignable and then having a buyer ready to buy ASAP. For CT, how much equity ought the owner have in the property for it to be a good fit for me to put under contract so that it can be assigned to someone who either wants to buy and hold or fix and flip? Also, with owners who still have mortgages, what potential challenges with there be with their lender if any?

[Craig Hunt]

Luis,
I missed the podcast but I would recommend doing research in your area and attending a local real estate investment group. Networking and marketing will be key factors to helping find both properties and fellow buyers. Generally the REIAs are mixture of buy&hold, buy&fix, wholesalers (some people do all three depending on situation) and vendors. If wholesaling, bringing legitimate deals to the table will yield serious buyers. But it's good to know what buyers are looking for. Commonly a formula for wholesaling is After Repair Value(ARV) x 0.70 - needed repairs/ updates = sales price - wholesale fee = purchase price. Although the percentage depends on your area and the specific deal. For equity/profit margin, it depends on after use intent (rental or retail sale) of the property; a common guideline for flipping rehab is a minimum profit of 20% or $20,000 that I've seen. Otherwise it may not worth the effort but that is why it is good to assess what your market is like and what cash buyers are looking for. Hope that helps! You'll find much info here on BP. The key to success is taking ACTION!!! Don't over analyze. Just do it!