What’s a profitable percentage for end buyers in wholesale deals?

2 Replies

Hi Christopher,

When evaluating a Wholesale deal, I use a calculator that helps me evaluate the (1) holding time from acquisition to selling retail,  and (2) the total financial costs of the project (after getting several estimates)

I always look to buy a property at 0-50% of ARV, and assume the (more major) rehab will be roughly 25% of ARV, leaving 25% "gross profit" to cover expenses like borrowing costs (loan interest, fees, property taxes, insurance, utilities), and selling costs (buyer/broker commission, selling concessions) On occasion a property will only need 10-15% of ARV for rehab/repairs, but that's rather uncommon.

If you leave that 25% of ARV for the Rehabber to keep, they'll ultimately profit roughly 10% of ARV for their "take home" earnings.

Excited to see a few of your deals!