Hello , i have a question, hope somebody can help me, heres the deal:
i found a fixer upper for 129k, and its under contract (my name and/or assigns) for $115k, seller paying closing costs)($3,500)
ARV= 190k to 210k, it needs around 25k ,
- im planning to ask 20k for it, is it too much? its a very desirable location
2)should i do a double closing because of the profit?, i dont really want the buyer to know how much i profited
or how should i do this transaccion?
- if he pays me for the contract, is that capital gain?
Thank you all
I wholeale 6-10 deals per month. I suggest the following;
- 20K assignment fee–depnds on the exit strategy of your buyer. Cash buyer will likely not want to pay that much. A buyer getting hard money may also be locked into the 70% ARV ratio. so 20K based on your purchae price and repairs may be too much. 10-12K may work better for your buyer’s #s. Remember, you want to create repeat business when you are wholesaling.
Take care of your buyer and he or she will take care of you.
- Do a double closing if you feel uncomfortable with the buyer knowing or your profit/and or getting in the same room w/ your seller.
- Seek the help of a tax professional, but more than likely this would be ordinary income b/c you are not holding the property.
Thanx a lot , i was waiting for a sign, sometimes you got too greedy, and forget about your other end…always a win, win, right?
Thank you again