need advice on deal

Bird Dogs, Wholesaling
1

Hello everyone,

I have a big question. :banghead I have an investor that is very willing to get rid of his property. The house has been on the market for several months with no takers. It has been completely rehabbed and is ready for occupancy. I’m looking at it as possible rental property for investors. He wants me to make an offer. I know how to figure this out if there are repairs to be done but how do I figure out the offer if nothing is to be done except for maybe holding costs? Would it be using 60% (or 65% ) of value less holding costs less my fee? I need to be able to make an offer quickly. The house is listed for 65,000.00 and tax assessed at 98,000. The comps in the area are about 89,000.

And, could this be deal?

Thanks for your help in advance.

2

whats the rents in the area for that type of propery? i’d probably do about 70-75% of fmv based on the ROI with the rent you can get for that type of house in that area… not sure if im making any sense to you but base your offer on having some good equity in the deal for your investor and how they are going to make there money back on the deal based on rental income hope this help’s :beer

3

one other thing ask your buyers what they pay for that area for rental homes if you dont have buyers get in contact with some landlord/investors(can find them on craigslist etc) and ask them…or call up your fellow wholesalers(we buys houses sign’s) and see what they say about the area if they are familiar with it… :beer

4

Thanks for your reply thatreiguy.
I do have an idea of what the rent would be. I am a little unsure about the area so I’m trying to get a hold of some local investors who may be able to help me decide if this would be an area an investor would be looking into.
Appreciate the advice! :biggrin

5

Your deal would look like this:

$ 89k (ARV)
x 70%

$ 62,300

  • 5,000 (Wholesale Fee)

$ 57,300 (MAO to seller)

Any contract price less than $57k would be golden, and would leave you with room to play. You would explain how you cane to your decision, and let him know this would be an all cash offer. Would he be open to doing a Lease Option with you? Then you could turn around and do a lease option with a tenant buyer & create a sandwich, which would be a win-win-win for everybody.

Am I missing anything, guys?