HELP, HELP!!! I have a wholesale property I found that’s listed for $129,900. The property is a gut-rehab cap cod home on 5.2 acres. The home has three other severely damaged homes, sheds, outhouses etc that need to be removed. The ARV is $180,000 and I determined that my offer price is $14,380.
My question are: Q1. Is this formula below right? Q2. Once I get this approved by the seller I plan to assign the contract to an end buyer investor to purchase it for a minimum of $24,380. Q3.Can someone forward me an assignment of contract for the buyer investor? Q4. Where do I get a proof of funds letter and will the seller call to confirm the funds? Q5. Is there a set amount for the earnest deposit? Can my earnest deposit be $10 will the seller think the contract is weak - feedback? Is there anything else I need to know??? Please respond here or PM me
$180,000 - ARV Amt
0.6 - 60%
$108,000 - ARV Price
$108,000 - ARV Price
$(85,000) - (- Repairs)
$(23,000) - Bal Fwrd
Infomercial Investor: Hey, Mr. Listing Agent, what’s your fax number so I can fax you an offer of $14K with a $10 earnest deposit on that $129,900.00 property you have listed.
Listing Agent: Click … [dial tone] …
Do you know what 6% commission of $14K is? And now the agent has to split the commission with at least his broker. I don’t know who would get a black eye first if the vendor saw the offer–the vendor for paying almost no commission or the real estate agent for insulting the vendor.
The purpose of why real estate agents are hired is to get as close to the vendor’s asking price as possible. An agent is a professional sales person, who is hired to sell to get top dollar because the vendor doesn’t think they are good enough at sales to do it on their own. If low ball offers like that ever went through, it would defeat the purpose of why you have real estate agents to begin with. No amount of logic is going to change that.
To low ball, you have to cold call people with run down properties that are not listed with real estate agents or set up bandit signs. Once it’s listed with an agent, forget it. An agent had to promise the seller to get close to the vendor’s asking price in order to get the listing. He isn’t going to jeopardize that relationship presenting low ball offers because it’s going to mean he could lose the listing for not doing what he promised.