First Wholesale Deal
Hi Guys ~
I have a property under contract, that will be my first wholesale deal, barring any disasters.
The house is an extreme hoarder house. The heirs inherited the property. One of the siblings had lived in it for years and filled it up to knee level in junk. He is no longer living there and it is now vacant. According to the owner, the city threatened to condemn it, but they have not moved to do so as of yet. It is a 2 Bedroom 1 Bath, with 1450 Square Feet of Living Area. Property sits on 0.52 Acre.
I got the property under contract at what I believe is a good price. It's just under the tax assessed Land Value.
I am meeting with potential Buyers this week. I want to make sure I market the property at a good price, so both my Buyer and I will walk away with a great deal.
Here are the numbers so far:
ARV = 120,000
This is based on comps for 3 Br properties sold within past year, within 0.5 miles. The home is in the city's "Historic District". I would assume buyer would make it into 3 and at least 1.5 bath, given the size of the property. If it was kept as a two bedroom ARV would only be about 80,000.
Purchase Price: $11,500 . Contract signed with Seller. $10 Due Diligence, 30 day period. $10 EMD.
Rehab Estimate: $50,000 . (This is a very rough estimate for a full rehab. For a 1450 square foot house, I think a lot can be done for 50K.)
Asking Price: 34,000 (ARV 120,000 x .70 = 84,000 - Rehab 50,000 = 34,000 )
Desired Wholesale Fee/Profit: 22,500. (Selling Price 34000 - Purchase Price $11,500 = $22,500 )
Is this a good asking price? Buyer should stand to profit at least 25,000 for the Flip.
*This link comes directly from our calculators, based on information input by the member who posted.