1st Deal in NJ, Please Help!!!

General Real Estate Investing
1

I posted this in the Wholesaling area and didn’t get much response. Thanks to those who did offer some advise.

Here are the details.

Found a house worth $330k, and that’s conservative for this neighborhood.
Needs $40k in work, have contractor to do the work for that amount, he’s seen the house and done the estimates.
Owner will take $200k, have already confirmed with her and sending her the paperwork.

I want to wholesale this house because I don’t have the cash to buy it and fix it.

What do I ask for the house as a Wholesale price?

I used the 60% calculations and came out at $195k and that should be right, but I have to leave enough in it for the end buyer.

It would be hard to sell to an owner/occupant, this house needs new kitchen and bath.

Thanks in advance. DAVE

2

The current value is $330K or the after repair value is $330K?

If the later, this sounds a bit marginal to wholesale.

Many investors use 60-65% of resale value minus repair costs to ballpark profitabity. For example, on yours, (.65*$330K)-$40K = $175K. Buying at $200K means this is about a 73%ARV deal.

To be a 65%ARV deal, the ARV would need to be about $370K. Since you want to wholesale, you need to get it for LESS than 65% so you can pocket the difference.

Chris Smith