Wholesalers Purchasing & Assignment Contract

[Jimmy Samai]

I am looking for a sample purchase & assignment contract that would protect me while doing wholesale deals. May somebody forward me something at Samai.jimmy1 Gmail.com

[Ryan Blake]

@Joseph Johnson Jr MOST DEFINITELY! That is how you will know how much you can spend to get the property and how much profit you can make. You will also need to be able to estimate repairs.

I feel like a decent equation to use is:

Max Offer = (70%* of ARV) - (Repairs Needed) - (Wholesale Profit)

*About 6 years ago you would have needed to use 65 or even 60% because profits were that big. During that time, wholesale profits were quite a bit higher as well.

I.E. You get a response from a sign or letter you sent out. You do your research before you get to the house and based on all the comps you think the ARV is $200k. Your first number in the equation is set, 70% of $200k is $140k. Next you visit the house and see that the roof is old and some singles are missing (new roof $7k). You ask the homeowner what they like and what they don't like about the house. Find out if they know anything that is not working. They tell you the HVAC is old and doesn't cool well (new HVAC condenser $3k). You walk the house and the foundation, electrical and plumbing all seem to be functioning properly. Great news! The neighborhood needs a standard finishout to reach the potential ARV (Standard finishout on 2,000 sq ft x $17/sq ft is $34k). You ask the owner for a few minutes and quickly run the numbers. You want to make your offer while you are standing their face to face. This is the equation you run.

$140k (70% of ARV) - $44k (Repairs Needed) - $8k (Wholesale Profit) = $88k (Max Offer)

WARNING: If you blindly contract properties without taking into account the profit for you flipper (or rental owner) you will lose quick. No buyer will take you seriously if you are only sending deals that are over priced. I ignore emails from about half of the wholesalers that send me deals because I know that in the current market they are pricing the properties way too high.

Don't get ignored, do the math. 

I hope this example helps and I hope others will give feedback on my calculations with what they do for theirs. Everyone will go about it in a slightly different way but the good ones will all come out with about the same number.