I"m working on my first wholesale deal and had some questions. I found a seller that wants to move into another home using the money from the sale of her home as a down payment. The house was willed to her by her mother who passed away over 4 years ago. The thing is seller never got the property put in her name. Is this something that can be resolved at closing or should I not work this deal due to the property still being in her deceased mothers name? Also the arv on the home is about $60k seller wants $40 but will except less. The home needs about $15k in repairs and I would like to make at least $3k on the deal. How should I work the formula to be good a deal for investors? And what sould my offer price be? Any help would be greatly appreciated.
Well the title thing can be complicated and so I wont get into that. But for the formula part I can show you how to work the numbers.
So lets see, 60k arv -15k repairs…well that already 45k. you have to tack on what your buyer will want to make plus what you want. So say buyer wants at least 20k profit on this…45-20=25k. now the max offer is 25k. and you say you want 3k…25-3= 22k… so the max that you will want to get this property under contract would be 22k. See how that works?
ARV - Repairs - Buyers Profit - Your profit = Max offer
60 - 15 - 20 - 3 = 22k
Thank you so much for that break down on the numbers. I did advise the seller that she is going to have to get a clear title brfore we can go through with any deal. so for right now I’m on to the next one.