Hi everyone, so I'm trying to work my first deal with a guy right now. His asking price is $39,750. It needs 10 to 15k in updates. So let's just say 15k. We've negotiated but he is saying he won't sell it for less than $37,500. From the comps that I have found the ARV is about $82k. If I take 5k wholesaling fee would that be a good deal for an end buyer?
It might be but it really depends on the accuracy of your rehab and ARV numbers, if this is your very first deal, forgive me but I don't have a ton of faith in their accuracy. What specifically needs to be fixed?, did you thoroughly investigate all the major systems? Have you been inside the house personally? What comps did you use to arrive at your ARV? Are they similar in age? sqft? location? finish level?
Assuming your ARV and repair estimate is correct then I see 5-10k as a potential spread.
No problem with locking it up just make sure you don't tie it up for a month if you cant assign it.
Disclose to the homeowner that you can try and make the numbers work at their price but you would have to get some of your partners involved, ask him for a 2 week option. If he is okay with this then get it under contract.
Honesty and transparency is always the key in this business.