How to make an OFFER?

12 Replies

Hi, I need some help here with my first wholesale offer. Mind you, if I go through with this..it will be my first wholesale deal. So here's the thing.. This lady wants to sell her house for 100,000. I pulled up comps for it and I got between 134,000-161,000. I already did a walk through her house and it looks perfectly fine, it doesn't need much repairs. The only thing is that I don't know how come up with an offer yet. I have talked to an investor and he said I could do this method. Which is getting the ARV-repair cost - assignment fee= offer...so I got this 158,000x.70=110,600 then 1,675(sqft)X9=15,075(repairs) then

110,600-15,075=95,525 then 95,525-5,000(assignment fee) = 90,525 (offer)

Can someone please tell me if I'm on the right track here?? I really don't want to blow this away. Also another note, she just told me she has a mortgage on it for 92,000.. What do I do??? Someone please show me the right track in baby steps. 

Hi Cynthia, she probably wants to make a small profit on the deal if she owes 92K. You are definitely on the right track with your offer. Depending on how tight your market is, you may be able to slightly break the 70% Rule because it's nothing set in stone - just a good measuring stick. 

I would just make the you're pulling comps sold in the last three months, and I would pull between 3-6. If the 158K is the correct ARV, you should have a solid deal at 95K and she will still receive some type of profit. Hope this helps. Good luck!

Thanks Christopher Salazar for your input.  but, now this lady called me and said she owes 96k on it and wants 100k... What should I do now??? I don't want to call her and sound stupid like I don't know what I'm doing.  

Originally posted by @Cynthia Hernandez :

Thanks Christopher Salazar for your input.  but, now this lady called me and said she owes 96k on it and wants 100k... What should I do now??? I don't want to call her and sound stupid like I don't know what I'm doing.  

 @Christopher Salazar 

Hello Cynthia,

It looks like you've done your homework here. First the homeowner said she owed $92K on the property and now all of a sudden it's $96K. This woman is using negotiating tactics as one would expect, but hers seem not to good in my opinion. At the end of the day do what you think is best. You can meet her in the middle at 95K like Christopher Salazar stated and show her the numbers if necessary to further explain your situation or you can walk and take the chance of her running back to you and settling at your price. Good Luck!

@Cynthia Hernandez

What to do next is a bit of a moral dilemma. Some/ most wholesalers will go ahead and get it under contract at 100k and try and blast it out to buyers and see if anyone bites. I personally do not to get properties under contract unless I am almost positive I can move it. I have had to tell a couple of sellers that I did not get it for cheap enough and we can either re negotiate the purchase price or I wouldn't be able to close on the property.. not a fun conversation. Especially if you actually care if they sell the their house.

You can go that route or you can do what is sometimes the best thing. Let it go. Most new wholesalers will try their hardest to make something out of nothing.. especially on their first few leads. Sometimes you just have to give your best offer and walk away and trust in your marketing to bring you more leads! 

Make sure you are evaluating the repair costs the proper way.

okay well now im  just curious.. do i have the option in buying the property by Subject TO instead of wholesaling it??? if so, how does this method work? and would it be a good idea  to go that route? 

@michael Noto what is the right way to come up with the repair cost? 

As long as you have the ability to fund it, I'd give her the 100k, or whatever, and rehab it. List it. Get 165 with upgrades. 

good equity position for a subject-to offer :)

Did you ever close on this deal? Have you had success with wholesaling? please give an update

@Cynthia Hernandez   Yes, older thread but curious how everything turned out Cynthia?

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