All Forum Posts by: Account Closed

I had to make this topic over, I hated the way that typo looked on the other topic but here's the situation.
I'm a full time wholesaler and am looking to make a significant amount of money wholesaling this year (goal is 300k). Now I'm also going to be rehabbing houses this year but I'm trying to find out how much of my profits I should put away for taxes. What do you guys suggest? 1/3 or 1/2? If you tell me a half I'm going to throw up lol. But seriously I'm just trying to make sure if I put a percentage in an account for taxes be good at the end of the year. Thanks in advance.

Well you guys are not going to believe what's happened over the last 24 hours. The town that this deal is in is hot and the property the house sits on has a lot of room to expand the house, but that's not the point. I went to sit down with the realtor from the town thinking we were just going to develop a business relationship and I thought she was going to try to list the house and sell it as is. She also brought the comps. She throws a curve ball at me when she says that her and her husband want to buy it. She said their kids are grown and they are looking to downsize so they would buy this house and put their house on the market which is also in Westfield but in the higher end side.
She offers me $200,000 cash.

So on the way home after the initial shock I called the rehabber who I planned to sell it to and he said that they want the deal and will bring me in on it. He said that we could work out a profit split. So they would buy the property for $175k then work it out where I end up getting a percentage of the profits where it equals close to $200,000.

Now I told him I'm making a lot of money at this point. If I sell the house to an owner occupant who pays me $200,000 I blessed them because when they finish remodeling that house is worth close to 400,000 if not more. It's different with a rehabber, I do business with rehabbers, I have the utmost respect for then because that's where I'll be shortly, I feel a little bad. But I can't ignore that this woman offered me $200,000 cash and can close in a week.

So he said that the exit strategy could bring a higher profit because they're going to have a builder expand the house and hopefully get it up to close to half a million so he still wants the deal. And going with him I'm still learning the process, still can go to the job site and I'm doing a huge deal with someone that I plan on working with for years, although i get $75k upfront and have to wait for the backend profit. If I sell to the realtor, it's just one deal but its $100,000 minus me pulling the oil tank and title work. I need some opinions on this one. Thanks in advance. God bless.

Hi Keith, the hard money lender is not his partner on the deal. Im not interested in being in for 6 months for a 3 way split. I'd rather get out in 2 weeks. The way this one worked it just made sense to work with this rehabber. It's an investment into my career, but I'll definitely give you all the details in a few days. Your big fish is on the way brother. God bless

You guys are pretty funny especially those of you who make such derogatory comments about wholesalers, but here's some more info, if I meet with a seller, I tell them I'm buying your house. I'm going to est repairs and based my numbers off of what I believe to be an accurate ARV. After we make a deal, I contract in my llc's name and begin my due diligence. After we have a contract I have equitable interest in the property. I have the right to sell my interests just like I have the right to buy that house. I just plan to sell my interests and know this upfront.

The only time we won't close is if its not a deal after further evaluation and we know this within a week. If you worked with serious wholesalers you would understand the value because most guys ways of finding deals bring them a lot of headaches and competition. A deal being delivered to you is not valuable? The person who brought it and can bring more is not valuable? That's crazy and you'd never be on my buyers list with thinking like that.

And Rob if you still don't see the value of doing business with a serious wholesaler, you can ask the rehabber that's getting ready to make over $100,000 from a deal I brought him. He didn't have to negotiate with a seller, didn't have to negotiate with me, didnt have to drive for dollars, present his highest and best offer, etc. all he did was pick up his phone. If he thought like you he'd be $100,000 poorer.

Great post Nathan and congratulations. I was looking for the breakdown in your other posts. How'd you end up making out on this deal, what town was it in?

This is definitely a great post Will. It's also very encouraging because it confirms what I already thought, most wholesalers are garbage. Go to every Reia meeting and 50% of the attendees are wholesalers, maybe more. You go in thinking, "man there's a lot of competition in this business" But the 80/20 rule applies to all things and in this case it's like 90/10 because only 5% of the population make real money. That's why I love what I do because I know I can find deals! It excites me to hear people talk about how most wholesalers don't know a deal. To be a great wholesaler you have to be a great marketer, great communicator/negotiator and over estimate repairs and under estimate resell value (if you can't get it dead on) great post brother. God bless

Also even if he sells it at the worst case of $400k, he's still at about 66% of ARV and a potential gross profit of $135k. Good thing is his wife is a realtor and is going to sell the place for them which will save them 25k on commissions so I guess it does work out for him too.

Hello everybody!!!!
Happy New Year to all of you guys and your families.

I have some pretty exciting news about this deal. The Lord is still working miracles. So I've been able to do a little more due diligence on this deal I locked up. It was in a beautiful town and I was using freedomsoft to give me comps. Well it ended up being way off because it doesn't take into consideration that this house is about 1700 square feet but it sits on about 3/4-1 acre of land. The highest and best use of this especially in this neighborhood is to build an addition. Then the ARV will be about $400-$425k. We're looking at about a $100,000 rehab.

I called the rehabber that wants the place and told him that with the higher ARV I'm going to have to raise the price a little. He said "no problem there's still room for you to go up but nothing crazy". Now I know I shouldn't be worried about his strategy but he said he's lined up a partner on the deal because its such a big project. As I explained in previous posts most likely we'll be partnering on some deals this year, but his profit is now going to be split in half.

So here are the numbers because I don't want to go too high unless you guys tell me that I should.
My purchase price $100,000

Rehabbers purchase price $165,000
Rehab $100,000
ARV $425,000
Potential gross profit $160,000

Now I know he's using a hard money lender but I guess as a wholesaler I can't concern myself with how much he's spending on financing that will affect his profits because I know other buyers that use private money that would love this deal. At these numbers he's getting the deal for about 62.5% of ARV. Do you guys think I should stick with this scenario?

Thanks Jenkins, that's exactly how I was looking at it.

So we've been progressing nicely (thank God) through this deal. So after careful thought and further evaluation of the property (it only needs about 60-70K in rehab work) I've decided to sell it to the person who it would benefit me the most to sell to. A local rehabber and I have formed a relationship and he understands that my goal is to be a rehabber. He's going to show me the entire process and in return I'll make sure he has a steady stream of deals coming in. We're actually going to be partnering on some deals where we come 50/50 to the table with money, I'll find the deal, and he'll run the rehab as he shows me the process so I'll be there most, if not all of the time.

So now on to the numbers. I have the property contracted with the seller for $100K. I have the property contracted for $150K with the rehabber, after he rehabs the property, he should easily get $350K in this neighborhood, as it will be the nicest place on the market. The house didn't need as much as we thought and the only contingency that we have is to inspect the underground storage tank. If it's fine, that's a huge blessing and that's what I'm praying and believing for.

So I'll keep you guys posted as we should be out of attorney review Monday. Thanks once again for everyone's help and advice. God bless.