Hello everyone, as a newbie that has chosen wholesale to be their start of niche, I'm starting to understand the whole process of getting a motivated seller, but I'm confused on how I should handle figuring out how much repairs costs after walking through the home myself, should I do the research online myself? Should I hire a contractor to do a walk through? Or do I hire an appraisal? What I'm really unsure about is how I approach my cash buyer with a VERY good ARV on the contract, because I am NOT choosing rehab as my niche and am unsure of repair costs. I really don't want to mess this up.
Hey welcome to BP! I would recommend you have a contractor walk through the property let him give you a estimate of repair in writing with photos. So next time you go see the property tell the seller your bringing your contractor to view any repairs needed
There are a lot of ways to learn how to estimate repairs and ARV. You will get better over time if you keep at it. Get to know people in your local REI community. You can a lot from them. I know a few buyers and contractors already that are willing to have me walk a property with them and point out how they estimate repairs. I attended one REIA meeting where a contractor walked us through half a dozen properties and showed how he estimated repairs.
Something to consider is that different people will come up with different estimates, and different buyers may have different visions of what they want to do with the property. For example, a landlord wants to make it rentable. A rehabber may want to make something top of the line, or just sufficient enough to sell quickly.
I get caught up on having good estimates, too, but I'm finding it's not quite as important to be perfect as I had thought. Buyers will often use your numbers as a starting point, so you want your numbers to be reasonable. But in the end, they will make their own estimates. If you have a good buyers list, you can always hold an open house and have a number of buyers look at the property. They will all come to their own decision as to what it's worth, and they can make their offers to you accordingly.
Thank you, that helps me out a lot! Going to continue on my networking to get more in-person advice.
@Winnie Rim Welcome to BP! Winnie here is something that very few people will tell you about wholesaling. If you are going to be a wholesaler then you need to know a lot about rehabbing and a lot about buy and hold because those are your main buyers for your deals. You need to know about what they are looking for in order to find deals that are attractive to them. You need to know about rehab. You need to know about hard money. You need to know about BRRRR. You need to know about traditional financing. Wholesalers must have a larger knowledge base because they have to be able to evaluate a deal and determine 1. Is it actually a deal? 2. Who would want to buy this deal?
If you dont know how to estimate repairs then you need to bring a contractor when you walk through a house. An appraiser isnt going to give you a repair estimate, an appraiser is only going to give you an approximation of the property value.
Wholesaling is a lot more work then most people realize. Be sure that this is what you actually want to do before you get started.
@Lydia T. Hey Lydia, thank you for the raw break down, it's what I really need. Is there any way we can connect so I can ask you more questions in the future? I read your profile and if you're willing to help out a newbie like me I would gradually appreciate it very much
@Winnie Rim You can send me a message here on BP anytime