Where does that price come from?

Bird Dogs, Wholesaling
1

Here is a sample wholesale deal I found. Don’t worry about the property address

Wholesaler’s Scenario

4751 Equity Blvd. Wholesale, USA 21261
Original Offer & Contract Price with the Seller $27,650

The After Repaired Value is $117,000

Repairs needed $25,000

Asking $49,500 obo

Went Under Contract and Sold for $39,500

Gross Profit $11,850

I know how to calculate the MAO in the wholesale deal to the seller.
I want to know where did the $39,500 come from. Is that just a random number I come up with to determine my own profit? I want to see how much I should sell property to an end buyer to get my profit.

2

Even when you do calculate the MAO you don’t want to get the property at that amount unless you have to. Notice the M stands for Maximum this is what the most you would negotiate for to wholesale a property and not go over that amount…

You want to negotiate much less than your MAO but not too much where it’s a very low ball offer.

In that example the wholesaler got $10,000 less from the sellers asking price which means he must have offered all cash and convinced the seller to go with this offer.

3

I believe I see where this goes. So, the lower the price I negotiate with the seller is the cost that can be made up once I assign the property to an end buyer. The most I should take out as profit could be say 10k. Yes? No? I’m just guessing.