I’ve read various posts on here about wholesaling a house and assigning contracts, however, I do not understand the process of doing it.
The house I came across is a 3bd 1 ba for 29k, and the closest comps even for shells are 34k. I really don’t want to buy it myself, id rather just wholesale it for the 5k.
What do I do now?
u do nothing because at 29k, that’s fair market value - your comps are at 34k.
now if you can have seller sign an assignment contract for like 14k, now we’re cooking. otherwise, move on.
investors DON’T WANT AN ASSIGNMENT ON A PROPERTY FOR FAIR MARKET VALUE.
take a house and subtract at least 30% of the market value (need good comps - look at recent under contracts and closings - real estate agent, buyer rep).
so do the math - 30k - 30% = 21k…WITH SOLID COMPS - at these low numbers, you may want to go lower, say 45%…so you’re picking up the houses at like 55 cents on the dollar - then shop them to people IN YOUR BUYERS LIST (build this BEFORE you go out and put properties under contract).
then you assign them to investors for 70 to 75 cents on the dollar.
you make 15 to 20 cents on every dollar you sell it for. make sense?
THIS IS BASIC idea of course.
I am a newbie, but I can tell you that, based on hundreds of hours of research as well as action in the field, this reply is Spot On! Get away from the Retail mentality. So many people will work exceptionally hard to keep you focused on Retail. You’re wholesale. Period. End of issue. :anon
He said that shells are selling for $34K. If that’s correct, he might have a deal there.
If you want to make the wholesaling game a whole lot eisier on yourself work on building your buyers list before going out and finding good deals on homes. Even if you find a great deal without a buyers list you will still get no where unless you can close on the home yourself. Too many newbies like the looking at the homes part because homes don’t reject you and know that you dont know what you are doing. Buyers are at least 50% of the wholesale game. It’s not the only way but I can tell you from ALOT of experience 1. Find Buyer 2. Find houses 3. Get Paid.
i didn’t see that “shell” part -
the bottom line is, find out what comps are going for in the area (narrow it down).
if you’ve got a house that needs some work and is WORTH - meaning at retail it will sell like a hot cake (under 60 days) for 50k (or rent out nicely) - and you can get it for 29k, then yes that’s a very good wholesaling property. talk to some potential buyers (investors) who do business in the area - put the house under contract with assignment rights - then shop it to your investors for an assignment “fee” of 7k or whatever makes sense for your investors (and your wallet).
so u buy at 29k - heck see if you can pick it up for 25k (you’ll be paying “cash” - cuz your investor will be)…
now at 25k - you figure it would take 8k in improvements to bring it up to snuff in order to snatch a nice 55k sale…
so 25k + 7k = 32k…25 to the seller and 7 to you
this leaves your investor enough room to put 8k into it - now there basis would be 40k - they make a nice 15k profit when they sell for 55k
you don’t put money into it, you don’t hold it, you don’t have to market it to sell it, realtors and the like - you just see the numbers and the deal for you and for your buyers.
i did this with a house that is now my sister’s house - we left her with over 180k in ARV - and my brother and i made a nice mint. it was a family deal, but it was the same exact idea.