Hi,
I have a seller that needs an early close and he is willing to take a price that is 70% FMV. Besides a dirty rug and new paint he claims the house does not need anything else. What questions should I be asking that will be advantageous to the person that I will be wholesaling it to?
Thank you very much
Nikita123
Nikita,
Your next question should be: “What time today can I come by to tour the property with you?”
The worst possible mistake you can make is to go by what the seller TELLS you the house needs…you need to see the house for yourself. Go room to room with the seller, and you’ll be surprised at all of the things you will uncover. After you assess the REAL repair need for yourself, make sure that 70% FMV is deep enough to cover the rehab…I usually go for 65% FMV as a safer bet to cover most typical repair scenarios, but of course this is conditional. In Texas, most investors use hard money to invest, which is loaned up to 70% FMV, so if the repairs exceed the total margin, the deal is not considered “good” and is nearly impossible to flip.
If you take contracts to buyers that are “good deals” because of your due dilligence, then they will be more inclined to do business with you in the future…but if you only tell them what the homeowner told you, and they find out there is much more involved, then do you think they will trust your contracts afterward?
Not likely.