I’m fairly new to wholesaling and I’ve come across a number of “distressed” properties. The question I have is how do I make the “cut” on properties that are probably not worth doing the follow up? For instance, I drive up to an “ugly” house that is obviously unoccuppied and not being maintained and requires somes repairs, how do I in a time effective way determine whether I should put this house on my list of potential wholesale properties or not? So how Ugly is Ugly?
How do I determine rather quickly if the repairs/improvements are within a reasonable cost range relative to the value of the property? I am thinking making this decision is very important before I spend the time to try and find the owners and go through the contract negotiation. What do experienced wholesalers do about this situation?
It should be no concern to you if your assigning the deals. Your buyers should be dictating the level of ugliness that you will stoop to…
If your buyers want ugly, then find them ugly
If your buyers want pretty, then find them pretty.
Don’t make the mistake of running around looking at homes when you don’t have any buyers lined up for them.
Good luck, it looks like your off to a good start
Eric - you, as the wholesaler, typically always have to estimate the cost of repairs to help determine your ‘selling’ price for the end buyer, or to determine if the seller’s asking price really makes this a “deal”. What, have you found, is the best way to do this? I know that nothing beats experience, but when you were first starting, how were you able to accurately estimate these costs? Many a trip to Home Depot? :smile
VolNavy07 is right. The hardest thing in wholesaling is determining repair cost. Here is a link to a cost list that was provide for Katrina recovery. I find it very useful overall. http://www.home-builders.org/Katrina%20Info/Repair%20Cost%20Pricing.pdf
I look for a sturdy roof, cracks in foundation/bricks, and style of windows. If the roof is folding in or has holes, it’s very costly. If the foundation is cracked, or brick are falling off, it’s costly. If the A/C unit is missing, more cost. If windows need totally replacing, it’s costly. If they are aluminum frame windows, normally you just have to repair the glazing, and I do that my self, very cheap.
Water damage is the enemy. Bottom up flooding, or roof down leaking. It creates mold and rot.
Other than that, everything else is easy and it’s a go.
Ricky