Ok, let's cover some basics!
A 70% LTV home wholesaled to a buyer should be in pristine condition inside and out and completely remodeled in the last 5 to 7 years!
Any home in any other condition is deducted for every single thing required to create a pristine home!
Now let’s take a 70% purchase price home, I take it your providing 3 or more valid comps to support your price. These need to be really fresh because the buyer will need proven value for an appraisal or for a private or hard money lender to substantiate value.
Now let’s suppose for example a value of $100k retail and subtract from there.
$100,000 Retail FMV
$70,000 Wholesale price
<$6,000> Investor listing commission for end buyer resale
<$2,500> Escrow cost for end buyer sale
<$1,400> Escrow cost for wholesale purchase
<$1,400> Points to hard money lender for $70k purchase loan of $56k (80%)
<$351> Cash on cash cost of $14,000 dollar down payment for purchase
<$1,680> Interest on Hard Money Loan for 3 months
<$300> Electric service for 3 months
<$300> Water / Sewer / Trash for 3 months
<$150> Lawn service for 3 months
<$240> Pool service for 3 months
<$400> Termite treatment before end buyer closing
$14,721 Cost to buy 70% LTV Pristine Condition Home to Resale
$15,279 Potential Investor Profit if Everything Goes as Planned and Projected
Now every single repair, replacement, cost of materials or labor comes off of $70k including your mark up!
$70k for 1000 sq. ft. home for example.
<$1,500> Carpet / Vinyl @ $13.50 per yard installed
<$2,000> Custom Painting (White Ceiling, Colored Walls, White Trim)
<$1,500> Landscape Upgrade
<$5,000> Wholesalers Mark Up
<$1,500> Wholesalers Closing Cost
$58,500 Wholesalers Contract Example
I always provide my own Hard Money Lender so any buyer can put 20% down for example!
I can always tell my buyers XX percent down and Dave’s Donut World and Hard Money Lending will carry the loan for 6 to 12 months!
Get on the phone and find a Hard Money Lender to work with who can pre-screen your wholesale properties and agree to loan with X or XX down! Cash buyers are great too but you need to have financing arranged for those who may need it!