Wholesaling percentage in Dallas, Texas
Hello you all,
I'm marketing for wholesale deals in Dallas, TX and it's seeming at 70% of ARV minus repairs and my wholesale fee I've been too low to sellers. I am aware that in various markets the percentage can be increased up to 80% or so. My question is for local wholesalers in the Dallas-Fort Worth area, are you all having success at an higher percentage then 70% or is it truly just a numbers game at 70%? Please provide honest feedback when you can.
Thanks,
Danny
Most Popular Reply
Even in your local market, these numbers will change based on many different parameters such as price points, level of rehab, if is is a buy and hold deal, etc. So asking for general back of the napkin averages will not get you far and neither will using the 70% "guideline" (its NOT a rule) for all your offers.
You want meat and potatoes, here it is but it requires work and effort: GO to your local title rep and have them pull all the cash closed transactions in your market area where the buyer was an entity. Then locate any MLS listings for photos of the projects before and after rehab and get an idea of what was done to the project. It will be somewhat of a guess but calculate the repairs. Once you know what they paid, what they sold it for and approx. what they put into it, you can calculate their net purchase %.
Another way, find these all cash buyers, go ask them what their specific criteria is at set price points in specific locations with specific rehab levels and they will tell you what they need to buy at for it to work for them. Numbers don't lie, you just need to go dig them up. Using some arbitrary % of ARV for your offers is NOT the best way to be successful here.