Need Help With The Numbers!!!!!
I have located a home that is in an awesome location and is appraised at 160,000k. The foundation needs alot of work which will be 50k and the rest of the rehab will cost around 30k. I need help figuring out an offer to where I can make 5k and leave enough profit for the rehabber. Heres are my figures: 160k - 80k in repairs - 6k in holding costs/loan fees - 5k for my fee - 30k for rehabbers profit = 39k offer. Do these numbers seem accurate to you experienced wholesalers??? Thanks, Matt[ Edited by pannet on Date 04/17/2004 ]
Seems reasonable although I'd bet you that you won't get it for that. A lot of people seem to have an unreal expectation with their house. If this is from a bank then maybe. GOOD LUCK
Pannet:
Let's start from the beginning:
Purchase price:
Acquistion Cost:
Rehab Cost:
Carrying Cost:
Sales Cost:
You forgot to figure in Sales Cost. That will be approximately $9600.00 commission plus another $3-$4k for title escrow, FHA non-allowables, termite, home-warranty, taxes, etc...
If you are going to wholesale it, I dont think you need to leave so much in it for the investor. In California, wholesalers leave $10k - $15k profit in it for the investor after all the dust is settled. This includes paying real-estate commissions etc..... Just some food for thought.
Best Riches,
Jeffrey Adam
_________________
"The only place success comes before work
is in the dictionary."
[ Edited by JeffreyAdam on Date 04/17/2004 ][ Edited by JeffreyAdam on Date 04/17/2004 ]
Jeff, I don't understand what you mean by 9400 in comissions. There will be no RE agents involved in the purchase of the property and most rehabbers in my area sell their home by owner. I do understand the aquisition was left out, but I'm not sure how to figure that. Any suggestions??
Pannet:
If they are going to sell it by owner, then disregard the 6% sales cost. In terms of the aquisition cost, it varies., Are they paying cash? Are they using hard money? Are they using a private investor? I would figure on them paying 3 pts with another $1500.00 for escrow, title insurance, fire insurance etc.... Let them figure out how they are going to purchase the property. One tactic I would recommend you employ is to contact some hardmoney lenders and also private investors. See if they will let your "Wholesale Buyers" assume the financing on deals you "Wholesale." As long as they have decent credit it should not be a problem. You can then wholesale properties with financing in place. You will have people lined up at your door! I use to get my "Wholesale Buyers" approved with my private investor and hard-money lender ahead of time then I could offer "Wholesale Deals" to my "Wholesale Buyers" with financing. Works out great! I know there are people who will say your "Wholesale Buyers" can get a conventional loan, however with my experience it takes too long, they want too many explanations about the future rehab. It turns out to be a full-time job just getting one of these loans closed. Besides, time is of the essence. You also risk not closing the deal and losing your "Wholesale" fee.
I have seen this happen before to other "Wholesalers."
Best Riches,
Jeffrey Adam
_________________
"The only place success comes before work
is in the dictionary."
[ Edited by JeffreyAdam on Date 04/17/2004 ][ Edited by JeffreyAdam on Date 04/17/2004 ]
Thanks Jeff, your advice has been very helpful!!!! You experienced guys on this website are a god sent to us newbies!!!!!
Quote:
On 2004-04-17 16:51, pannet wrote:
Jeff, I don't understand what you mean by 9400 in comissions. There will be no RE agents involved in the purchase of the property and most rehabbers in my area sell their home by owner. I do understand the aquisition was left out, but I'm not sure how to figure that. Any suggestions??
Pannet,
If you send me an email I have a tool that can do that for you. Email me and I will send it to you.
RVATX
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