All Forum Posts by: Michael Lee

Hello, Troy 

When it comes to wholesaling a rental property you have to find out the ROI or Return on Investment most investors who look to buy and hold look for at least 10% ROI so you should probably use that number as a starting point. They also look for cash flow as well the cash flow but that depends on the investor most would like to know their Return on Investment before taking on a rental, also just like a fix and flip the area matters as well better area= better tenant and less headaches

Example 

Purchase Price: $90,000 Closing Cost: $1,000 Rehab Cost: $8,000 Total Amount Invested: $99,000

Rented for $900 a month $10,800 Annually, Cash Flow $198 mon ($2,376 annually) for taxes and insurance So your annual return is $8,424

8,424/99,000= .085 or %8.5 ROI which would be a very solid deal for an investor

Hope that helps 

Yes I was thinking along those lines as well thanks I appreciate it 

There hasn't any permits to prove that the additional bedrooms and bathroom was permitted so I am assuming that it's not so I can basically look at as a 1,596 sqft home instead of a 3,214 sqft home where I am getting confused is that the city has counted as a semi finished base area the additional sqft is heated and cooled but I don't think its permitted as far as bedrooms and the bathroom additions 

Hello, All 

I found a great potential deal in West Palm Beach that I am looking to renovate as my first full fledged flip. However the property has been pretty difficult to comp with only two slightly comparable properties to go on.  Here are the specs 3/2 @ 3,214 CBS Home sitting on an Acre lot in a quiet area. 

Now the problem I am facing here is that it's classified as a 3/2 this area is about 1,595 sqft and here is where it gets interesting there is also additional 1,618 sqft of space that includes an additional kitchen and 2BR and 1BA with it's own separate entrance, the county website includes the additional space as a semi finished space but not the bedrooms and bathroom so it's basically seen as a large space 

The only similar comps are a 3/2 @ 1,530 sqft which sold for $305,000 on an acre lot and a 5BR/4BA with a pool @ 3,170 sqft which sold for $490,000 where I am getting confused is should I assume the property as 3/2 since the county only sees it as a 3/2 or a 5BR/3BA because thats what's there.

I do have a few days to decide but I am looking to either bring in a partner or a hard money lender on this deal so if anyone has any knowledge on how to attack this one I would greatly appreciate it 

Here is a very basic example of course there is more involved but here is a basic starting point for you hope this helps 

Return on Investment= Annual Cash Flow/ Total Capital Invested for example 

Purchase price is $100,000 Closing Cost $1,000 Repairs: $9,000 total amount invested $110,000 

You can rent for $800 a month $9,600 annual rent income minus $167 a month 2,004 annually for taxes and insurance which makes the annual return $7,596 

So your ROI is 7,596 annual return divided by 110,000 total amount invested which equals 0.069 or 6.9% Return on Investment

A simple easy way to get started would be to go to your local REIA or investors meet up often times there will be a few people there who work with title companies. They are more likely to be investor friendly and want to help you in getting your deals closed. It will also give you the opportunity to establish a relationship with them while also getting your name out there and letting everyone know what you do.

Also you can ask investors who they like to use as their title company as well and you give them a call or go by and speak with them as well hope this helps. 

Hello, David 

Well your risk level is something you will have to decide what you can handle everyone has different levels of risk. But wholesaling is a great way to find out which local markets are better for buying and holding or renovate and resale, by going to the local REIA meetings and talking with other investors they will know the area best for buying and holding.

There are a number of strategies out there but one I often hear about doing well is the BRRRR method where you Buy Renovate Rent Refinance and Repeat it creates equity and cash flow for you at the same time while also allowing you to invest in better neighborhoods which have better tenants in which you can safely scale up and expand your portfolio

But ultimately the deal is in the numbers so the better you are at analyzing deals the easier it will be for you know when you have found a good deal so practice analyzing as much as you can to sharpen your skills because even as a wholesaler your deal analyzing skills must be up to par because your selling your deals to investors who do this on a regular basis hope this helps 

Yes whenever you are evaluating a deal as a wholesaler you always have to factor in your fee since it will part of your end buyers purchase price so try your best to create a win-win-win where the seller leaves happy they sold for a price they are comfortable with you made your target fee and the buyer got a good deal that will keep your buyers finding you for deals instead of you finding them

Well you can start by driving the specific area your buyers are interested in if you are able to and look for vacant homes or homes that look like they need a lot of work (i.e driving for dollars) you can write down the address and check the county website for the owners address and send them a letter 

Hello, Carolyn 

I would say as a wholesaler the thing you would want to focus on most is your ability to evaluate a deal correctly, your buyers are going to be investors who fix and flip or buy and hold properties on a consistent basis. Your ability to evaluate a deal correctly cuts their time in half in going out and finding a deal themselves so you have to basically think like an investor who will be buying the property from you .

Of course your focus should be to build your buyers list but remember your list will get very short quickly if deal evaluation skill aren't up to par so practice deal evaluations constantly with properties on the mls to hone your skills good luck