I’m a newbie wholesaler still, even though I’ve made a couple deals and lost three times that, But over about 150+ properties that I have made offers on I have never been able to get close to 50cents on the dollar, FSBOs, MLS, Bankruptcy, foreclosures 65 to 70cents on the dollar at best. What am I doing wrong? Why am I not finding those 50cents and lower deals?
Another related question is how to find a good FMV on property? Call RE agent all the do is look at the county assessor… I can do that faster than they can in most cases. Ask them for COMP SOLDS they never seem to be able to find any 1 or 2 at the most within the last year? Am I missing something here?
You need to offer a fair price around 60 to 65 cents on the dollar to get any deals. 50 cents on the dollar is a low ball offer unless you are buying in the hood/war zone that need major rehab.
You want to purchase a good condition updated home for 30% under FMV! If you are living in an area of the country that is growing and home values are appreciating you might be able to buy as low as 25% below FMV! If your area of the country is declining and home values are falling you want to buy at 35% below FMV!
From that point any repairs, rehab, remodel, etc. are estimated and deducted (Minused) from the average discounts above!
Are you serious? You are getting 65 - 70 cents on the dollar, and you’re complaining? LOL. Dude, there is nothing wrong with that! Turn your frown upside down, your giving me the runs.
50 cent deals are possible. But very few and far between.I think you should focus on your earnings coming from pricier deals. This is a volume and margins game, imo.
In order to get deep discounts like that, you have to JUSTIFY it. Bank managers won’t jeopardize their jobs so that you get a good deal. Provide a break down of the repairs, carrying cost, commissions upon reselling, and (if in declining market) the projected loss in value when reselling in 6 months. I put that in bold so that the manager can realize if they don’t accept my offer, they will be losing value while waiting for another offer.
Another reason is you may be going after too new of properties and those listed with realtors. Those discounts come with failed listings or homes they’ve been carrying for 12 months or so. If you find one that was on deposit and just fell apart … then strike fast and low. The bank may have already strategized their actions based upon the property being off the books. If that is the case and you say you can close with cash in 5 days … BINGO!
Establish your relationships with banks and tell them you have cash to buy deep discounted properties (ie: 75% off) and then wait for them to contact you (but keep workign the relationship)
I just think it’s funny that the guy finds something to say about getting deals at 65 cent/dollar. Got to be careful for what you’re asking for brah. Sure, you can find it, but at what costs? I mean, if you are looking for a drug house in a war zone, or some place way out of town. But in most metropolitan centers in NORTH AMERICA it isn’t really the norm. Find great neighborhoods first…start with that. Impliment whatever marketing tickles your fancy and target that area. I suspect the reason why this guy is asking the question is because he is only focused on wholesaling. And what I bet is he’s finding that other investors are staturating his geography doing the same thing. This is exactly why time after time I give advice centered around being a well rounded investor rather than just focusing on one thing. Even if you don’t want to take payments over on a house (like in a Sub2 deal) my opinion is that you at least need to know HOW a deal like that is structured. Then you now have that competitive edge over most of those other guys. So then you can assign that Sub2 deal or stay in it and profit from it. So I don’t know for sure if this is the reason the guy is asking the question, but I’m willing to bet he’s getting frustrated. I’m willing to bet if you ask other experienced guys who do all deal types on here what percentage of deals they would say are ‘all cash right now at a discount’ is, I’ll bet most would say wholesaling only accounts for a fraction of all the deals they do in a year. I can vouch for that, as cash deals only account for roughly 25% of deal I personally do.
Them type of deals are all over the place. Some people are making a good living wholesaling houses in the hood/low income areas. I just choose to stay away from that. 60cents on the dollar is a good price. You will find plenty homes cheaper than that. But over all thats a good price.