Can someone explain how to go about a first time Wholesale deal? I dont have the money for a deal yet. Exploring my options.
I have a buyer who will pay me 80% of market value for just about any house I want to sell him.
Find someone like that, then find a house that the owner will sell for less than 80% of market value and you get to pocket the difference.
@Brent Shields thats great advice thank you! Well put! Basicaly, i can look over the property, so what needs to be fixed, talk them down to 70 or 75, and i pocket the 5 or 10%?
The rule of thumb is more like 70% of ARV (After Repair Value) less rehab expenses.
First determine the ARV by getting good comps. Working with a realtor here is a good idea. Of course don't expect a realtor to keep doing this forever for free. To compensate them, let them know you will pass on any leads to them that don't work for you. So if someone wants to sell their house, but it couldn't be a deal for you, refer them to your realtor.
Second, get a GOOD estimate for what the repairs will be. This is a bigger topic. You can get a contractor to help you (again, don't expect them to do this without some compensation), or learn about how to estimate costs. There are some good resources here on BP to help with that.
So, if you find a house where the ARV is $200,000, and you estimate repair/rehab costs to be $30,000, you need to be able to sell the house to a rehabber for $130,000. You get the difference between your offer to the seller and the cost to your rehabber. That's largely based on your skills in negotiating. Research negotiating as well.
NEVER underestimate repair costs. Rehabbers don't like that, and they are your customer. Don't think you can squeeze money out of their profits just to line your pockets.
@Barry Pekin thank so much for the advice! Greats tips i will look into!