Wholesaling: Is their a formula/Rule of thumb to determine offering price on reh

For all “rehabbers” and “wholesalers”. Is their a formula you use when determining how much you will pay for a distressed property. I have heard many “rehabbers” look to purchase these properties at 70% of FMV. How would you determine what your actual numbers will be be. Would you (for example) add up your rehab/closing/holding costs and then determine what your net profit would be based on a percentage of purchase price as well as a percentage of your rehab expenses?

“Rehabbers”, what do you expect of someone who would assign the property to you? I would imagine 3-4 comps in the area which sold within previous 12 months which is very comparable in size of lot/ interior and location. Written guestimate of repairs to fully rehad property(which would actually come to within 10-20% of your actual costs. I reside in in North Jersey and have very intersted in “wholesaling properties” to honest investors. Any info you could provide me with would be very much appreciated!!

If you like, I made up a excel worksheet I use to determine possible deals. The formula people use is

70% of ARV - repairs, closing costs, holding costs - wholesaler fee = Maximum Offer

Basic info to get for the buyer is the purchase price, comps, arv, repair costs, holding costs, total projected expenses and a possible exit strategy for the property. Also once you get a property under contract take it to a title company and begin the title search.

Verb is right. I do want to add though, that the % of ARV that the investor/buyer would expect varies from area to area. I’ve heard of some areas where buyers look for 65% of ARV, and others that only look for 80% of ARV. It varies from buyer to buyer, too. Usually, more experienced buyers will want a larger discount from ARV than inexperienced buyers will. Call different buyers in your area and ask what they are looking for.