What profit do rehabbers want to be considered "a good deal"?

Hello All,
I have been a wholesaler for about 6 months and doing well. I am selling about 2-3 homes per month and determined to do more. Because I am trying to offer great deals to my clients (you rehabbers), I would like to know the answer to this very important question. My experience tells me that a minimum of 20K is what investors like to see as profits. A lot of rehabbers have made 30 - 50K+ but the market now is changing to the point where is harder to get those spreads on a regular.
I know that pricepoint has a big factor as well. If buying homes with end value’s at 80-100 the spreads should be different than buying properties with end value’s at 120-150.
Please give me your feedback as I am very interested in making us all the most we can.


Depends on the investor. Investors with a lot of overhead (like me) can’t do much with $20k. I would personally make about $2k from a deal like that. I have a whole separate tier of expenses for the revenue to sift through that DIYers don’t have. My company’s criteria is $50k minimum and total costs not to exceed 80% of the ARV.

From my observations it seems that individual rehabbers are happy to make $20-30k, sometimes less and always more. Even with numbers like that they might pocket more per deal than I do. This is probably where most of your clients will stand.

Some are happy to only lose $10-30k. They thought rehabbing looked easy on TV so gave it a shot. You should be selling your deals to these idiots!

I appreciate the feedback. I had a property that I could not sell for almost 3 weeks. Getting 2 offers at 55k and 58k. Which was less than what I bought it for. I then had a 3rd offer for 67,500 from a repeat buyer of mine. I told the one investor that I had a offer for 67,500 and told her that it was a family that would not have to outsource the labor. She replied that she couldn’t afford anything more than 55K b/c of the labor. Which may or may not be true. Who knows?
I do agree with you with you on this point. I just wanted to make sure that I always leave plenty of meat on the bone for my buyers.
You mentioned 50K is your minumum? What I have found thus far in San Antonio and other markets I am in, is that the retail value are as low as 65K and it would be nearly impossible for me to offer that kind of spread on a house with this low of a value. In South Florida, I can do it because the pricepoints are 125K-200K end value. Thanks.

In most parts of MD, 65k won’t buy you a trailer. Infact, I’ve seen trailers on a half of an acre selling for over a million dollars (it was the land that was valuable). I’ve never sold a house for under $200k, so getting a $50k minimum isn’t too difficult. Just another good reason to not live in Texas :cool .

If you can only find 2-3 properties a month to wholesale, sticking with investors with small operations would be wise as they don’t require much revenue to stay afloat. You won’t be able to maintain the volume needed for a larger operation at reduced prices.

Knowing a lot of rehabbers, most don’t have a set criteria for profit. They just hear a number and decide on the spot if it sounds good to them. I believe it starts sounding good at around $20-30k. That’s one hell of a margin on a $65k house though.

Where do you guys find your investors for wholesale deals? I’m currently going through the Sunday newspapers and looking for investor ads, but I would like to use other methods as well. I’m thinking of trying to get my hands on a Section 8 landlord list this week if I can find one and I have a relative who’s a mortgage broker, so I’m hoping to find potential investors in those areas.

Post an ad in your local paper offering a fictitious house for rehab.

When they call, take their name and number and apologise profusely that they missed the deal.

Then you have a list, or at least the start of one

I think that you’re asking the wrong people. You need to be asking your buyers where you need to be at, not some strangers on a website.

As noted from above, what someone here may have to have doesn’t matter and may not even make sense in your market.