Deal or No Deal on Potential Wholesale Property?

Deal or No Deal on Potential Wholesale Property?

Randallstown, MD · Member since 2015 · 9 posts · 1 vote

I found a property I am considering putting under contract for 170K (from 184K) in a wholesale deal. The issue is the property has already been rehabbed. Yet, the ARV according to Zillow is somewhere around 300k+. But the ARV on sites like Redfin, Realtor, etc is as low as about 172K (but prior to rehab). I assume the Redfin listing of the house is outdated because the house looks much older than the one posted by the seller after the rehab. I need to be able to make money on the back-end by assigning it. I've seen comps as low as about 175k to as high as 300-400k. What would you do in this situation? I haven't seen it in person yet, but I am just trying to decide if it's even worth seeing. If I can't make money from assigning it to a rehabber/flipper (may not make out so well if market value is closer to asking price, as opposed to 300K+ where they would make out well) or rental investor (may make out well based on rents in area, but still may or may not get much equity if ARV is on the low-end as opposed to 300K+) why waste time seeing it. It's pretty far away from where I live. I don't want to lose out on a great deal, but also definitely don't want to jump into a bad one. I appreciate your feedback...-David

0Reply
25 views

Most Popular Reply

Real Estate Investor · Burlington, VT · Member since 2010 · 2k+ posts · 1k+ votes
9y

@Account Closed Is it on the MLS? If it's on the MLS at $184k, it's definitely not worth $300k. Even if it is worth $184k, you'll need to get it under contract for a far lower number than $170k for it to be a deal.

- Tom

See this reply in the discussion

4 Replies

Jump to latestLatest
  • Real Estate Investor · Burlington, VT · Member since 2010 · 2k+ posts · 1k+ votes
    9y

    @Account Closed Is it on the MLS? If it's on the MLS at $184k, it's definitely not worth $300k. Even if it is worth $184k, you'll need to get it under contract for a far lower number than $170k for it to be a deal.

    - Tom

  • Wholesaler · Dayton, OH · Member since 2016 · 252 posts · 227 votes
    9y

    Zillow Zestimates can be REALLY far off, so always take them with a grain of salt. How accurate are the tax appraisals in your area? For example, in my county they tend to be within about 10-20k of what homes actually sell for, but other areas they can be over or under by a lot. That might give you a frame of reference.

    The other thing to do is go on Zillow and narrow the map to the surrounding neighborhood but don't look at areas that cross any major roads, etc. In other words stick to the close neighborhood. Then uncheck "For Sale" "For Rent" and everything except "Recently Sold". Choose the number of beds and baths of your house, and in the other options, set the square footage to within 10% above and below the sqft of your target house. Then try setting it to houses sold in the last 90 days. You'll have to look at the photos and things to see if it is REALLY a comp, as some houses might be a lot different, but this will start to give you a ballpark idea of what things are ACTUALLY selling for on the market.  If you don't see anything comparable in the last 90 days, go to 6 months, 1 year, or even 2 years, but beyond that it won't be very accurate anyway.

    Hope that helps.

  • Rental Property Investor · La Plata, MD · Member since 2011 · 216 posts · 117 votes
    9y

    David, something doesn't sound right. If the property is rehabbed and is worth $300K, why didn't it sell for $184K?

Join the conversationCreate a free account to reply, vote on answers and follow this thread.