65% vs a different formula (in South Florida)

[Duriel Taylor]

Hello Everyone, Here in south Florida the market is so saturated; between realtors, wholesalers, and traditional investors there's no room to truly negotiate the numbers. I have read mostly everything about wholesaling and everyone talks about the 65% rule. So it got me thinking to adjust this rule. For instance; a home is selling for $230k but valued at $200k (ARV & comps) and based on the 65% rule $200k x .65= $130,000 then minus $10k (repairs) = $120,000. My max offer is $120,000 then add $10k ($130,000) for my fee for my end buyer(s). But here in SoFlo the market is hot most sellers will wait for the better deal and or to the higher bidder. Is it possible to change the rule to 80-90%? So my max offer will be $170k and my end buyer will be $180k. Now my end buyer only makes $20k(once they sell for $200k), would that be a desirable deal? From my understanding the 65% rule is a standard so end buyers (investors) have a bigger end number to play with. Please all investors, wholesalers, realtors give me your feedback thus I can have the logic and mindset to how this 65% rule works. Thank you all in advance for your time and feedback. Regards,

[Michael Garrison]

you would have to change who your target buyers are. But in your scenario, 180k selling at a 200 price you took the repair cost back out of it. A house in that price range will need much more than 10k in repairs I'm sure. That or you need to focus on retail buyers. The more buyers you eliminate the less likely you are to wholesale the deal.

Bottom line- the numbers are the numbers. You might need to ramp up the marketing and negotiate a little better.