Greetings realestate guru’s!
I am ready to make the leap and begin flipping. I am a 32 years old and have been around construction my entire life. I know all the ins and outs of what makes a good home a good home. Where I lack is the actual formulas or deal models. What set of numbers do you recommend I use to be as safe as possible in this uncertain market? You know, what its worth before versus what its worth after. Is one price range safer than another? Thanks for any and all repies!
My formula is very simple.
Add the cost of buying to the cost of fixing and holding. Subtract that number from the price you can sell it for.
Are you happy with the figure you end up with? Then it is a good project.
You probably are not going to be successful in flipping unless you know your market well enough to know what repair costs are and what sales prices are. Actual sales prices, not asking prices, and how low you have to go to move a property.
Unless someone is working in the exact neighborhood you plan to work in, they are not going to be able to give any decent guesses about figures or about what sells and what doesn’t.
You have a good background so I can see you wholesaling (to get you use to finding the super cheap houses) and then eventually turning to your passion of construction. You will get them cheap, make them structurally sound, and make fat profits.
You are in the right place. Good luck with your endeavors. :beer
I’ve never really considered wholesaling. Just kind of always envisioned myself buying cheap, fixing up, and selling for profit. I am friends with a realestate agent as well as a real estate attorney who are willing to work with me as far as getting started (of course we all want to get paid in the end). I’m pretty proficient in estimating and actual contruction in general. I have maintained a general contractors license for over ten years. I owned my own construction company for about five years but am now currently a superintendent for a commercial outfit. I’ve never considering wholesaling but am curious to learn more.
I really am looking to get back to my true passion of residential work while satisfing my inner entreprenuer at the same time. I know, go or get off the pot right! :flush
As apposed to what is your best advice, what are some of the worst mistakes you’ve made in realestate investing? Especially when starting out.
Not that you should listen to me but my formula is REALLY simple.
Too many folks get confused thinking that they need to know:
As a wholesaler you need to know the CURRENT “As is” market value and what % of Current “As is” market value your buyers are willing to buy at.
Eric Medemar
Thats right, get off the pot and take action. Don’t think about it to long. You will feel better once you get moving.
This is what I’ve gathered so far:
1: Locate buyers.
2: Locate property.
3: Secure property.
4: Transfer property to buyer.
5: Close deal and cash check.
I know it can’t exactly be this easy, but isn’t this the obvious anatomy of wholesaling? Am I wrong in this assumption? I just want to make sure I’m “thinking” in the right direction.
Thanks all!
As a wholesaler you need to know the CURRENT "As is" market value and what % of Current "As is" market value your buyers are willing to buy at.
What percent of market value are investors looking for? What deals have you guys been closing in the recent months? Obviously paying the lowest percent of value yields the greatest margain, but what number do the deals close at these days? As a wholesaler, what percentage do you need to try and secure a property at? There is a house up the street from me that has been vacant for about five years. Talking with my neighbor (who has lived in this neighborhood for over thirty years) I discovered that an elderly woman lived there and when she passed, left it to her children. Homes in this area with this layout are valued anywhere from 90k to 140k. Looking from the street, I believe this house could be valued at 75k. What percentage of value (hypothetically speaking) would an investor look to pay for this property? What percentage should a wholesaler look to offer?
Thanks
I like to stay in the 70% below area. I come across deals where even 60% is going to be profitable for both me and my buyer.
Some may be saying “Whoa! that’s low”, sure is, and there are deals in your city just like this.
At what percentage would you list and enventually transfer to the end buyer/investor if you secured a property at 70%. 75, 80, 85%? What is a typical profit percentage number for a wholesaler? I’m assuming 5-15% is the norm…