All Forum Posts by: Sekelle O.

@Daniel OKeeffe

If you are trying to figure out a good formula for MAO: the guideline is 65% ARV in a declining market and 70% ARV in a steady or improving market. In DC, some may go as high as 75% ARV or even higher because our market is so competitive, it is difficult to buy at 70% ARV or less; so the investor takes on more risk for less profit. Again, these are guidelines. For specific investors, the %ARV may be higher if, for example, they have access to cheap funding, have cheaper construction costs b/c they are their own GC, are a real estate agent so don't pay commission to someone else, or just don't know what they are doing. Some investors don't go by % returns and instead have minimum $ amounts for profits.

For DC, I think 70% ARV is still good. If you have a buyer that goes up to 75% ARV, then you know who to call when you get a marginal deal. If you have a buyer that only goes up to 65% ARV but will take on risk in other ways, say tear downs, structural issues, or high priced projects, then you know who to call if you get one of those.

The point of MAO is so you have a good guideline for making offers and pricing your wholesale deals. As your knowledge of what investors will pay for deals grows, so will your ability to price your deals.

If you are trying to figure out a good formula for deciding how much the wholesale fee should be, you don't need one. Just get the house under contract as cheaply as possible, and sell your deal for as high a price as possible.

I agree with everyone else about not crediting the deposit towards the December rent. With regards to trying to work out a payment plan or other arrangement, consider what is the likelihood that the tenant would be able to stick to it. She has always paid but has she been paying late? Is this a case of a tenant in a bad financial situation that has slowly been getting worse until now she is having trouble paying her rent? If she can't make timely rent payments, what is that going to cost you and can you afford it? I would run numbers based on the worst case scenario and decide what to do based on that.

The purpose of the MAO formula, as far as wholesalers are concerned, is to make sure that when we get a house under contract, our purchase price is low enough to make the deal attractive to an end buyer. Maximum Allowable Offer is just that: the ceiling price that the average investor would pay for a property. Use it to make sure that when you make an offer on a property, your offer is low enough to allow for a markup for yourself (your wholesale fee) while keeping the deal cheap enough for an investor to buy.

The profit for the wholesaler is dependent solely on your negotiation skills, how low a purchase price you can negotiate with your seller and how high a sale price you can negotiate with your end buyer. The difference between those 2 figures is your fee and it can be any number. The biggest wholesale fee I ever heard of was $92k. That said, I personally don't advocate the shark approach to wholesaling, trying to squeeze every drop of blood out of a deal. I believe in creating win-win-win deals where everyone gets what they need and at least some of what they want. That is how you get repeat sellers and buyers, how you build a positive reputation, and it's just good business.

@Nick Wright , that generic text idea is great. I am going to try it tomorrow. I will let you guys know how it goes.

I am also in the DC area and would like to attend the next meeting.

Do you know if the place will rent for enough to cover the mortgage payments and your expenses as a landlord? Maybe you can take it over and rent it out.

I am also in the DC metro area. Not an expert either but I usually estimate $30 per sq ft for repairs, until I can get a contractor to walk through the property with me and give me a better estimate. The $30/sq ft usually gives me a pretty good ballpark figure for medium rehabs. If the property is in really poor condition or requires a high end rehab, I up my estimate to $50 per sq ft.

In my experience "cash only" usually means the property won't qualify for FHA or other traditional financing either because of condition or, as in the case of a condo, the condo association lost its FHA approval. If you are using a hard money loan, then you may want to include the financing contingency and select private lender as type of financing.

@Mike Marko

Thanks for the tip. Any advice on how to add value without crossing the line into information overload?

Also, maybe you can list 2 or 3 tips on converting leads that you think would be most helpful or appropriate for my site.

Thank you for all the awesome feedback. It seems that I have a few changes to make:

1. To restructure the layout of the site

2. Reduce the amount of text on the homepage

3. Shorten the video

4. Testimonials

5. Have 1 specific call to action

With regards to the amount of information on the site, a lot of it is geared towards improving SEO. Also, the various information pages are different landing pages for the keyword groups I use in my PPC campaign. Example if you search "stop foreclosure" and my PPC ad comes up and you click it, you go straight to my Foreclosure page. Hopefully the layout change will help with making those pages more user friendly as well.

@Joshua S.

Thank you for asking this question. I read through the entire thread and learned lots of valuable information.

BTW, I understand what it is like to have an idea or concept take root in your mind, a question seeking an answer, giving neither rest nor quarter until that answer is found. There are lots of ideas out there that everyone knew would never work until it did. I think you did the right thing. You had an idea, and you sought advice from the experts. It won't work in this incarnation, and if there really is nothing to your idea, it will probably die a natural death and never darken the doorways of your mind again. Or perhaps, there is a kernel of potential there as yet unrealized by your rational mind but perceived by your intuition. In which case, the idea may instead be more like the grain of sand, irritating until layered upon with thought, further research, innovation, courage, daring and even good luck to perchance become a pearl.

(did not intend to wax poetic but couldn't help myself once I had gotten started, but I thing y'all get the gist.)