Asking what is the 65 to 70% rule

2 Replies

Hello fellow investors, I come to you all today as a newbie and trying to get my feet wet. I am currently trying to take action, I've been searching for properties on all websites and also doing my comps as well with each and every property. I've actually been picking up the phone AFTER I've done my research on the property to try to put in offers. But what is bothering me is I'm trying to make sure I have this 65 to 75% rule down pack 1st. See I'm a wholesaler and my motto is "as long as the numbers and the info on the property are accurate and can be proven, then the deal will sale itself" so I come to you all today to see is there any advice you can give me on the 65-75% rule and and other advice would help to. Thank you in advance and good day to everyone
Originally posted by @Christopher Flakes:
Hello fellow investors, I come to you all today as a newbie and trying to get my feet wet. I am currently trying to take action, I've been searching for properties on all websites and also doing my comps as well with each and every property. I've actually been picking up the phone AFTER I've done my research on the property to try to put in offers. But what is bothering me is I'm trying to make sure I have this 65 to 75% rule down pack 1st. See I'm a wholesaler and my motto is "as long as the numbers and the info on the property are accurate and can be proven, then the deal will sale itself" so I come to you all today to see is there any advice you can give me on the 65-75% rule and and other advice would help to. Thank you in advance and good day to everyone

 Hey Christopher...I love discussing this topic. I too am a wholesaler, and I have yet to successfully do a deal.

GENERAL RULE OF THUMB: For cash offers, you should be making offers at or below 70% of ARV (after repaired value) minus repairs. NOTHING MORE. For example...you've found a distressed seller, they have equity in a 3br/2ba house. You know comps are coming in at $300K; and you assess that the house needs $30K in repairs so that it will appraise at $300K (your ARV). Your offer should be 70% of ARV ($210K), minus repairs ($30K)....$180K.

Now, as a wholesaler, you have to subtract your fee from the offer. (from what I hear...haven't gotten this far yet)

Does this make sense? As a newbie, I'm still a little cloudy on this subject; but I love discussing it. Maybe some seasoned wholesalers can provide more insight.

Yes it makes sense and thanks for the advice I knew there was done type of formula just didn't know how it goes

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