Hey All,
I’m trying to put my first deal together, and I’m looking for some feedback on how my profit
should be structured, i.e. a percentage point (30%) or a minimum whole dollar amount (100k) etc.
From what I’ve come to lean it should be a “home run” so to speak, and I was just wondering
how your 1st deals were structured and what is a suitable figure for my 1st deal ?
Thanks !
Hi,
You know what, be happy if you can make $3k, $5k, or $10k dollars! I don't know who told you it had to be a home run, but making a reasonable profit is perfectly exceptable.
Most of my $150k fix and flips I average between 14 and 20 percent, or $20k to $30k for a margin!
If I am wholesaling a property I have taken as little as $5k for a quick same day deal. The key is move properties you can make a profit on, as the other side as you suggested is sell a property and “Make a Home Run” which can take months of holding, is not readily available and has more risk.
Structure your deals as a good thing for the buyer and good for you and you will be successful, but if you get greedy and try to put one over on your buyer; believe me word gets around and in a community your reputation will preceed you!
GR
I agree with GR on that one.
Remember, most of the the buyers are looking for a dollar amount, and if they haggle with you on your wholesale fee, make sure it's a price you can deal with. (It could make or break your 1st deal, too.) I like to think it's better to get some profit than nothing at all. In addition to this, if there is a lot of play room between the contracted sales price, and the ARV of the property, you could make some good money, no matter what it is.
I hope this help you.
* Dallas
very well said! making $3000 and having some more marketing money to spend on getting more deals, only add to the equation not takes away. I look at the overall picture, building your list, targeting your marketing, and following up with your list, keeping them interested in what you have to offer. :director
Don’t price yourself out of the market. On your first deal MAKE A PROFIT…any profit. Prove to your spouse and the nay sayers it works. get some confidence yourself and money injected into your budget and move to the nest deal. I real investor knows there is another deal around the corner, and another and another. If you strike a home run deal, it may be an opportunity to hitch aride with one of the top investors in your community… ask for 50% of the profit and volunteer to do all the leg work. You’ll learn tons from that investor. remember; 50% of something is worth 100% of nothing…you cann’t go broke making a profit …and knowledge is worth more than one paycheck.
Imagine getting paid to have a mentor instead of the other way around. I fantastic deal can get you that kind of “scholarship.”
NOTE: research the integrity of the investor you before you choose.
I’ve done hundreds upon hundreds of deals with guys just like you in my home town of San Antonio, Tx. I’ve flipped well over 1,000 deals in my 15 year career…I know - that and $2 will get you a cup of coffee. I’m just saying, “I’ve been around the block at least 1,000 Times.”
—Mitch Stephen–
Wholesaling is about VOLUME not PROFIT MARGINS. The big money is suppose to be made by the buyers. If you become greedy, you will price yourself out of every deal you put under contract and you will get a bad reputation in the process.
Good stuff. :bobble
My theory, if you can make a grand, take it run fast to your next deal! lol. You become better with structuring deals with experience.