Potential Wholesale deal Wichita

4 Replies

Good afternoon BP,

I have been working my direct mail campaign and just got a interested owner who wants to sell his rental property. The price he is asking for the property is below market value and he also mentioned he has replaced quite a few things in the property. I know I should go take a look at the property so I can get a better idea of what needs to be replaced or added.

I also know ARV needs to be accurate as well. Comps need to be accurate and up to date as well. I’m trying to get all the information I can from you guys before I call the owner back.

Thanks!

As long as you have a good idea of ARV and cost of repairs you will be able to figure out a good price. That's the whole problem everyone has to start out. No good knowledge of either. If you are going to compete with the other more experienced wholesalers in this market you should be sharing the 3 comps you used to get value.

Just make sure there is enough meat on the bone for an investor to buy your deal under market value also and for you to make a profit. If you are buying a rental property from a landlord, your end buyer will likely be an investor. This means a quick and easy sale if priced right, which is good. I would look at the country appraisal and think it is a good buy for a wholesaler if the price you are paying the owner is around 50% of the county appraisal, you can mentally factor in what is needed to bring the property to its after repair value. On the deal I bought from a wholesaler, my all in cost after my rehab reached just a few grand above the county appraisal, I still couldn't tell you what the after repair value is after my rehab because I ultimately don't care, I'm going to hold the property long term. I'm sure the arv is higher than my all in, or at worst, very close, because I used the country appraisal as a gage by staying within a few thousand of that number. I think buy and hold investors think similarly, arv is more important to flippers. Focus on the county appraisal and try and beat the seller down to as close to 50% as you can. I bought my deal at 66% of the county appraisal, the wholesaler likely was in the 50% range when he got it under contract. Perhaps you can make money even if the numbers aren't quite this sweet, but hopefully this serves as bit of guidance on what deals to investors are looking like here. If you think your end buyer can be a non investor, that could be a game changer. The deal I'm describing was done in Wichita within the last year. By all means, don't treat my post like the gold standard, I'm interested to see if you get other responses too for my own learning.

I'd be interested to see your numbers if you are willing to share. What is the seller trying to get for the property and what is the county appraisal? If you think an investor can rehab the property and stay very close to the price of the country appraisal all in after the rehab, you may have deal.

Thanks for your reply @Jared Viernes I have a good idea what the ARV would be after all repairs are done. Now I’m trying to figure out exactly how much it will cost to get the property in rental shape. I actually went to see the property yesterday and it does need lots of TLC.

Join the Largest Real Estate Investing Community

Basic membership is free, forever.

By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.