Help with Wholesale Calculations

[Syed Ahmad]

Hi BG Family,

I am new to REI and BG. Really appreciate all the info available on this website. I have been reading up a lot but have a slight confusion regarding Wholesale Calculations. I apologize if this question has already been answered

• Are wholesalers in California using this formula?
• MOA = 70% ARV - Repairs - Wholesale fee
• That means leaving 30% ARV for Buyers Profit and Fixed Cost (Purchase/Holding/Closing Cost)
• So for $500K property, leaving $150K for Buyers Profit and Fixed Cost
• Or using this formula?
• MOA = ARV - Buyers Profit - Fixed Cost - Repairs - Wholesale Fee
• If Yes, How do you come up with a number for Buyers Profit?
  • Is there a rule of thumb like a % of ARV, a wholesaler should be leaving for buyers profit?
• If Yes, How do you calculate Fixed Cost?
• I have read J Scott article on BG regarding fixed cost but do you calculate that cost every time for Wholesale deal based on the property value and for California?
• Or is there a rule of thumb like a % of ARV a wholesaler should leave for Fixed Cost?

Thanks in advance for the help.

Best,

Syed