I have just learned of whole saling and it seems like something I can do part time to get started in REI.
I understand the point of finding buyers and then finding deals.
Do you try to buy your properties at 70% ARV or what criteria do you use when you are looking for deals?
I saw someone post that wholesalers often use HUD properties. How can this be if HUD only allows you to buy at the ver least 85% ARV, so if you add your 5k profit it could equal 90% ARV. What investor would pay 90% ARV?
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SORRY WRONG FORUM. CAN THIS BE MOVED BY A MOD?
In general, you would be looking at buying at 70% ARV - repairs - your assignment fee. Obviously, the better you buy it, the easier time you will have selling it.
Not sure where you heard HUD properties are at 85% LTV. HUD properties are similar to any other REO type property in that you make an offer and they reject or accept.
Typically with HUD they don’t go much below 85-88% of LIST price – not market value, but sometimes you never know.
Most investors that you’ll be wholesaling to will look for 70% of ARV minus repairs, although there are investors out there that are looking for different numbers. Networking with investors in your area should help answer that question. The bottom line is that the better price you get, the easier it will be to sell to an investor, and the more you can make on the deal!
I would try marketing to motivated sellers rather than chasing HUD properties, HUDs aren’t the best deals to be found, at least in my area.
i find alot of HUDS are priced at or close to market value.
what’s cool is i subscribed to homesteps.com - k
i did the automatic emailing thing and homesteps shoots me emails regarding their inventory that matches my criteria.
i get the emails and let them sit…i check them like a month or two later and WHAM. they drop ALOT. give you one example - a duplex in Buffalo, NY went from 29,900 to 7,500 in 7 weeks. i called on that one today - unfortunately it sold on monday. but that just shows you that those suckers can move. i’d say out of all the ones i checked up on today - about 20 - 15 of them dropped by over 10k.
food for thought…