first deal

Im trying to put my first deal together. It is a brick/ slab foundation 3bdrm/2.5 baths 1600 sq. ft. two car garage. The owner asking for $81,396 the tax apprisal is 115,000, the comps within a half a mile radius say the houses will sell, on average 90 days, for 120,00(didnt drive the comps, but the houses must be in better shape than the one IM looking at, because it was on the market at the same time for 109,000 and didnt sell.) THe house was on the market for seven mobnths in total.

The repairs are: new carpet, interior paint, HVAC is over 10 yrs old, roof has three layers on it : that may or may not be a problem. bathtub in the master bathroom need sto be refinished, toliet needs to replaced in the half bathroom, new appliances, new counter tops.

I was thinking about whoelsaling the deal, but it could be to a flipper because the margin seems very thin, so it would have to be a lanlord.

The other thing that came to mind was setting up a sub too deal and assign that, if there is a such thing.

These are the only two ways that I haver thought of to handle this house.If anyone has another I’d like to hear it.


It’s very thin for a wholesale. Even if the ARV is $120,000 if you take 70% of that it is $84,000. That only leaves $3K for repairs and profit. Not much considering all the repair work you are saying it needs.

Is there anything that can be done?

Aarron, this is not your first potential deal if you don’t have any idea what you’re going to do with it. Right now, STOP! Don’t invest another moment of your time and/or money into this prop UNTIL you make a PLAN. Coming here and asking for advice on what you COULD do with it is a start, but before you even start making offers, much less getting to the negotiating table, you need to have a plan as to what you ARE going to do with it.

That said, you are assuming ALOT. You say the comps are $120K. Are they really comps, or just houses close to the target prop? Make sure that they are similar types of house. Also, you assume that they must be in better shape than target prop because target didn’t sale. DON’T ASSUME! There are many possible reasons that the prop didn’t sale. Make sure that you know what it was BEFORE you buy or you could be the one holding a prop that won’t sale.

That said, carpet and interior paint will cost you approx $5-10K depending on quality and your market rates for labor. 10 yr old HVAC is okay as long as it works. 3 layers of shingles is always bad. Moreso in markets with large snowfalls. However, if it looks/works good, it’s still a keeper for a resell. If it does need replacing, could be $5K or more depending on roof style and market labor. Other repairs (if really needed) $3-5K.

What to do? Can you buy the property, either with cash or financing? Will the seller accept a sub2 deal? What is the loan balance if so?

Why the specific selling price?



I have a back up plan, take the house sub 2 and wrap the mortagage and finance it to a rehabber for 6 months for 2 points and 12% interest. THe only problem with that is, it is an area of real estate investing that I dont yet understand.

My focus is wholesaling. I would like to find a way to wholesale this deal to a landlord who would be willing to hold on to this for three to five years, the margin is just very thin. I jsut wanted to get some feed back from you guys about any other ways to sell this to investors or other avenues i might be able take.

The owner is open to a sub to deal if all else fails. The specfic selling price is the amount due the mortgage balance.

Any ideas ?

Straight option this sucker for $500 @ $81,396 for 60 days. If you wholesale it for $86,500 you made a 1000% return on your $500 investment in 60 days , and your only risking $500.

For new guy’s this is THE ONLY way to go!

Get a lawyer.

I’ve posted about these options a bunch of times, just read the past posts, it’s a very easy, very safe way to make a great return on VERY little money. The key is to move QUICKLY!


I didn’t say a backup plan. I said a plan. You need to know what you’re going to do with something BEFORE you begin making offers. And it’s not a backup plan if you don’t know how to do it (just a point).

Your backup has the same problem that you’ve already mentioned. The deal is too thin.

On this particular prop, petemfa’s suggestion is probably the safest suggestion. Low risk, and potential good return.

Don’t put yourself in the owner’s position just so that you can “make a deal.”


Thanks for the guidance on this one guys

I am new to wholesaling and am starting soon. I would like to know how I can become better at determining what needs to be done to the foreclosure home so that I can present numbers for negotiation the first night I meet with the family after I do a walk through of the home. Do I need to pay a general contractor or can I seriously do this myself?

This is probably a question for the Short Sale forum. In any event, if it is going to be a short sale, get a contractor’s estimate to present to the bank.

I would try to talk the Seller down on the price. If that doesn’t work, you can always put down some option money (make it as low as possible like <$50) for an option period, and during that time, find a buyer to flip the contract to. Even if you make $500, something is better than nothing.

You could also “bird-dog” it for a finder’s fee to an investor that understands sub 2’s and wrap-arounds. This is where joining a REIA group & networking comes in. When there are deals in areas that I don’t understand, I bird-dog it to someone who does. Do this and others will bird-dog some wholesale deals to you.