Updated over 5 years ago on . Most recent reply
Help with website formulas
Hello all. I am gearing up for an ad campaign and getting my website going. At present I am trying to find off market deals for buy/hold, flip, or wholesale the properties that fit my criteria. I want to be as transparent as possible with my numbers and share them with the seller and possible buyers if I end up wholesaling them.
Right now I'm thinking with wholesale...75% of ARV - repairs - wholesale fee.
BRRR....75% of ARV - repairs.
Flip- ARV - anticipated profit (30K?) - repairs - 10k (for listing and closing)
Are these reasonable? Also, how does one calculate their wholesale fee? Is it standard across the board or depending on the property type. I know 10-15 k gets thrown around as a wholesale fee a lot but I’m not trying to be too greedy.
Any and all advice is greatly appreciated.
Most Popular Reply
Your wholesale fee is simply the difference between what you contract the property for and what you sell your contract for. At that point, it's all in the negotiations. You can shoot for a fixed or minimum number as a starting position.
The biggest thing you need to consider is if you are bringing a solid deal to your buyer. If you take all of the profit for yourself and leave nothing for the buyer, you're not going to do very well. Get the property for the best price you can. If that fits within your formulas, then you have a good deal. If it doesn't, you have to negotiate better or walk away.
I've heard of wholesale fees that are only about $1,000 and others that are $50k+.
As for the 75%, get to know your buyers. What percentage are they looking for. Most of the people I talk to want it to be 70%, while others have said they'd go as high as 85%. That, in part, depends on the market and the buyer's exit strategy.