Do offers change when inventories are low in market?

Bird Dogs, Wholesaling
1

When you are in a market that is starting to get competitive (lower inventory levels), do you make higher offers to motivated sellers?

Can you wholesale properties more easily to buyers at 80% LTV instead of the standard 70%?

Or do you still stick with making offers to motivated sellers at 70% ARV?

2

When you have a motivated market driving by a higher demand than the supply, then yes you will find buyers making at or above listing price offers. Of course, this may not be an across the board action as prices will move upward to satisfy the demand. If you hear that a property is getting multiple second time showings, it may be a good idea to raise your offer price.

As to your wholesaling question. Wholesalers are looking to make a profit. Their current formula is (ARV x 60 - 70%) - Rehab Costs = Wholesale Price. Anything greater than 70% and they are going to have a hard time pulling a profit.

3

Stick to the fomula and use 70%

4

Good to know.

Thanks for the info!!

5

Kalen.

Know your comps. If you know the ARV of the home you will be fine. You need to make sure that your offer is never to high. Better to be to low. You have to make sure its a deal attractive to you and your buyers. :bobble

6

I’d also say stick to the formula.