DEAL OR NO DEAL

Bird Dogs, Wholesaling
1

Can someone help PLEASE… I have a seller who wants 50k for a property zestimated @ 173k. Property needs some repairs. The propert next door recently sold for 200k and the property next to that is zestimated @193k. Do i try to take the seller lower without driving them away?? Property is in a nice area and sits on an acre close to major highways and transportation. seller also says there are no liens on the property. :help

2

The ‘Zestimate’ was $137K yesterday…what changed?

If the value really IS around $173K, what is the issue. Have you seen the property?

Keith

3

Your correct it should’ve been 173k i had the numbers wrong. The issue im having is whether or not i should try to take the seller lower or go with the 50k… I know its a numbers thing when it comes to wholesaling and i dont wanna kill the deal with trying to bring the seller down to the point it runs them away…

4

Sounds like a great deal even at 50k, BUT you must make sure the numbers are right. Get the comps. If you don’t have access to MLS try calling a realtor and have him/her email you some solid comps. Find a way to get the comps, also check out the property, and get the repair numbers also.

5

What is your exit strategy for the property if you were to get it? Where are you located?

Keith

6

My exit strategy is to: I DONT EXACTLY KNOW! I am new to this and right now im just winging it. Im still doing my research in wholesaling but i cant let this slip threw my fingers!! :banghead

7

If you bought the property, what would you do with it? …just letting it sit there is NOT a great idea!

Keith

8

I gave you a simple plan of attack for your situation. Of course, it’s not completely intuitive, so research and read up quickly to keep this deal alive.

I hope it helps.
John

Prerequisites:

  1. Understand what exit strategies are and which one you would use for this deal (wholesale/assign, flip, lease option, rent)
    I suggest wholesale/assign since you are new.
  2. Do title search to make sure title is clean. Don’t trust homeowner’s word alone
    Work with local title company to do a title search (may costs fee)
    If HOA, contact HOA for any liens or judgements, complaints against property
  3. Find cash buyers in your area NOW
  4. Locate true comps matching home for sell in a 3-5 mile vicinity

Step 1: Determine your MAO (Maximum Allowable Offer)

  • Figure 70% of ARV (After Rehab Value)
  • Figure out what the repairs will costs (minus this #)
  • Figure in your fee (minus)
  • Figure out closing costs on asking price (minus)
  • Total equals MAO
    65-70% ARV is maximum to sell quickly

Step 2: Contract with seller (with little cash as possible for deposit for 30-45 day close)
Add in contingencies (exit clauses)
Step 3: IMMEDIATELY MARKET your confident offer to cash buyers that close quickly (less than 2 weeks)
Step 4: FOLLOW THROUGH everyday on every lead
Step 5: Work with title company (or buyers) to close
Step: Reinvest that check in your hand for next deal

9

thanks john!