All Forum Posts by: Toris Diggs

Most wholesalers have a hard time selling their deals because they not don't even know the formula.  

1st find out how much there asking price is because their asking price might be lower than your MAO.

MAO = MAXIMUM Allowable Offer (ARV x .65) - Repairs = MAO but not your 1st offer. Your assignment fee is the spread between how much you buy it for vs how much you sell it for. Most investors want a .70 discount.

Example:  

ARV = $200,000

Repairs = $30,000

(200,000 x .65) = 130,000 - 30,000 = 100,000 MAO... You have to get the seller to sell it to you for less than $100K.

or

(ARV x .70) - Repairs - Your Fee ($20,000) = MAO

(200,000 x .70) = 140,000 - 30,000 - $20,000 = $90,000   So you need to buy it from your seller for less than $90K.   

or 

This is what most new investors do.  The owner wants $150K and they'll just get it under contract for $150K and you want $20K Assignment Fee = $170K and It's only worth $200K an they haven't even checked out the comps yet or gotten a repair estimate then they wondering why they can't find a buyer? 

@Kuba F.

Yeah that's true but like you said you need knowledge to be successful in this business.  So it's makes alot more sense to me to do things the right way in the beginning and you won't have a problem later on and you'll be able to sell your deals alot faster.  I know wholesalers that have been holding onto the same "deals" for 3, 4 months and still holding em.  And wonder why they can't find a buyer.  My mentor told me if you buy right than you'll be able to sell it right.  I might be new in this business and only had a few deals but all of my deals sold within a few weeks.  

I've studied several real estate courses went out with contractors and everything to learn how to figure out the numbers to know if its really a deal or not. I'm a numbers person. To me everything is just an equation. There's a formula for everything. Now I've been talking to other investors to work together try to get some joint venture deals together and one thing that I've noticed is that ALOT of these investors or supposed to be investors they either not really taking this business seriously and not doing their homework or they think that other buyers are stupid and just trying to get over. They either don't know how to do the numbers, the MAO, how to estimate repairs, or they not using the right comps. Because what I'm seeing is investors getting a property under contract for $50K, the AVR is $110K, and most of their repair estimates are way too low, and their trying to wholesale the property for $90K ???? And then they'll say oh its worth $150K and I'm like oh NO it's not? Where did you get these comps from because I'm familiar with that area and the houses in that area brand new only sell for about $110K-$120K at the most.

Comps = (H1 + H2 + H3) = Total /# of Houses

There not even using the basic formula for offers.  (ARV x .65) - Repairs = MAO 

Repair cost = (# of sqft  * Price per sqft)   Ex:  (House 2000 sqft * $15 per sqft) = $30,000 in repairs add another $3,000 for miscellaneous.  The cost of your repairs is determined by your area and area the house is in.  So if you talk to the contractors in that area you can pretty much get an idea of how much it will cost per sqft .   

minor repairs = $3 - $7 per sqft.     moderate repairs = $15- $20 per sqft     and major repairs = $30-$35 per sqft. 

OK thanks guys good advice. 

OK Thanks

How do I add members or request members so I can network with other investors

To any of the landlords on here. Lately I've been getting offers from sellers with rental units. Now I know how to do the numbers and figure out the CAP RATE and the COC but what Cap rate or COC do you look for when your purchasing a cashflow rental unit. What Cap Rate do you look for when you purchase properties ?  2%, 5%, 10%, etc?  Let me know everything that needs to take place of what do you need the numbers to be to make you want to buy a cashflow property and also Timeframe I know that's a factor as well for how soon you expect to make your investment back for it to be a go or a good deal.  And I need actual time lengths like 3yr, 5, 10yr, 15yrs etc.   What Timeframe do you look for to make your money back?  Not just the sooner the better I need to know realistic timeframes when I'm talking to sellers so that I'll know if its a good deal or not.  

Does anyone here have a special script or technique for cold calling vacant's and absentee owners? 

I need that Co-Wholesaling Agreement.  Can you please send it to me? 

Chris I'm an Investor and my sister lives in Florida and she's a Realtor Agent.  I know a few agents and Investors in Florida who pay for referrals.  I have NEVER heard of any case in which someones went to jail, lost there license or even went to court over paying for referrals.  There's ALWAYS a way around it.  This is America were the only thing that matters in this country is money.