Hello everyone. Wholesaler here:)
I’m currently negotiating a deal with a seller as she is open to the idea of selling her property. I asked her if there are any issues that she is aware of with the house and she says, only cosmetic problems. She intended to fix it up and sell it, but just had a baby and is trying to save money for the flip.
Question: If you don’t have a lot of details in regards to repairs needed, how should I calculate an asking price? She says Zillow has all the pictures of the house after I had asked her would I be able to assess the property for a quote. It’s in my neighborhood also so I’m able to look at it from the outside.
Any advice?
Business Owner · Wisconsin Dells, WI · Member since 2017 · 38 posts · 26 votes
8y
Depends on your market. I know here in Wisconsin my buyers will pay 75% of ARV so I get the property under that (under the 75%), it's really that simple. Look up "reverse wholesaling". I wouldn't try to become an expert at estimating repairs there's other people out there for that. As of now I'd just give the seller an offer range to feel them out, say 60-68% of the ARV. Most sellers who have a property on Zillow are in lala land so it's extremely important to throw out that range instead of a bonafide offer. If you found her on Zillow I'd stay away from Zillow. Zillow leads suck.
Rental Property Investor · West Bend, WI · Member since 2015 · 931 posts · 598 votes
8y
I would suggest bring contractor to look it over if you dont know construction costs, I have learned over the years what it will take, and can walk through and know pretty close what the rehab will cost, but that has taken a lot of deals to learn, so if you dont know get an expert. also consider your timeline, and current market conditions, I dont want to be negative, but at least my area, i think we are closing in on the peak, prepare for falling prices in the semi near future.
Douglasville, GA · Member since 2017 · 45 posts · 29 votes
8y
Not original to me but, “sellers lie”! In many cases they just don’t know.
Someone, you a local contractor or partner if you are out of the area needs to do a physical walk of the ground. Either now or during the inspection period to make sure you have an idea of the repairs required.
Exception that I have heard of is that you have a buyer lined up who deos their walk through and buys it.
Just make sure you have an exit clause in the event the cosmetic repairs end up being deal breaking repairs.
I am not a fan of excuse clauses but if there is new information that changes the numbers you have to be able to walk away or re-negotiate.
If she is not allowing you inside the offer price should reflect a complete gut job. Expecting anyone to make a serious offer on a non rented out SFR without being able to gauge what they are looking at is rough. That's what happens at auctions and people pay auction prices.