When wholesaling, do you examine the property?

Question

When you are a wholesaler, do you examine the property thoroughly? How far should you examine the property? How do I determine the value and cost of repairs? Do I need a lawyer or contractor?

Aaron Mazzrillo · Answer

I imagine you'll get some interesting replies to this post. You could search 'wholesaling' in the search box on the top right of the page, invest a few hours reading, and you'll be pretty much an expert on the subject. There is too much content on this site in relation to that business model.

I personally don't ever look at any properties I wholesale. But, I started out as a rehabber / flipper which is where I think all new investors should start. Wholesaling is the top of the heap, not an entry level gig.

Paul Timmins · Answer

Keela,

Remember you are trying to present a complete and attractive package for your cash buyers to consider.

The more info presented the better snapshot.

The cash buyer will do their own inspection prior to buying.

Paul

Arktavious Sally · Answer

Keela Chambers As a beginner in the wholesale game you should never make an offer on a property unless you know the asking price, ARV and repairs.

Jason Brooks · Answer

@Josh Barton When you go to the home page, you click the pros or professionals link. Then look for estimator tool. Very, very involved...kinda cool really.

Isaac Watson · Answer

I do ! It's helpful to do so & doesnt hurt! i would advise you to as you gain more experience. You might not have to on every every deal but if I see that the property needs work or some TLC I normally go look to asses the property to get a sense of the amount work it will need to make like new. Your end buyer will Appreicate you for giving them good accurate numbers as a wholesaler which will go along way to working with that buyer again.

Knowing your numbers is key to a successful wholesale deal! God Bless

Josh Barton · Answer

Jason Brooks Thanks for that resource… Can you provide the exact link? I'm having trouble finding it no the home depot page.

Jason Brooks · Answer

Sorry premature post, lol. ...If you have to go to a house alone to estimate, measure rooms height x width, take pictures of anything not in good-great condition, check and get pics of major systems (plumbing, heating/cooling, electrical) get good visible pics of each room, check for 
dampness/water in basement, check sill plate for rotting/termite damage, and take pics of the yard, the house, the neighbors houses/yards and the street up and down. Go home, figure the sq. footage of each room...drum roll please.....and go to the Home Depot website, and use their project planner tool. You input the dimensions, and the quality level of the project and you get a materials list and prices. The rule of thumb (again, as I'm told I have not yet tested this theory) is you double the cost of materials for a contractor to do the project, and triple the cost for a major system like electrical or plumbing...I have yet to verify but they do have an estimating tool that I'm playing with right now and you can indicate everything right down to permits and lock box and signage...anyone use this?

Sam Craven · Answer

I treat every wholesale like I would be the end buyer.  So my comps are realistic (no fluff) my ARV is actual, and my rehab numbers come from a contractor quote.

Can you sell without it?  Sure, but there is a reason my properties sell in 48hrs.  Trust.

Jason Brooks · Answer

My simple answer to that would be, unless you have rehabbing down to a science, treat a wholesale deal like you were going to be spending your own money on the deal. I would also say I have chosen to learn every aspect of the rehab process from multiple investors, contractors, and handymen. If you estimate your repair costs at the worst case scenario, increase that by 15%, and estimate a high end rehab, your buyer will have plenty of room to decide where they can cut corners, do the work themselves, or do a mid-level remodel if they want. Their profit will only grow. Also don't be greedy. Make sure your buyer has any extra profit over your reasonable fee. I'm just getting started but I know I will differentiate myself from the vast majority of wholesalers out there by providing great deals with plenty of profit, accurate ARV, and inflated repair costs (don't go crazy but estimate best quality/worst case). Most important get out there and be vocal, tell everyone you know and meet how much passion you have for real estate, and how much you want to learn how to estimate cost.

I'm not sure how effective this is, hopefully we can get some feedback on this, but I was told to walk through a house

Tom W. · Answer

Keela ChambersYes. This helps you determine how much its worth approx in current condition and how much for you to offer where it will still make sense for all involved. To determine ARV (which is the after repair value) there was a thread with @j scott where he had a pdf created to help with that.

With repairs you would be best to find a contractor who can help you understand some of the prices in your area. Some people have mentioned to pay a contractor to walk thru some REO houses and maybe that can help give you some clarity. All this is very important for you to have a decent grasp of if you are not working with someone who will walk you thru these steps

When wholesaling, do you examine the property?

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