Re: any ideas on wholesale price?? - Posted by timeinvestor
Posted by timeinvestor on October 19, 2003 at 13:22:38:
If you intend to wholesale the property to a rehab investor, expect that they will pay MAO(maximum allowable offer)AT THE MOST. MAO is 70% of the ARV (after repairs value) MINUS repairs cost, so once you’ve complete the following formula understand that this is what you should expect to sell it for AT THE MOST.
(ARV X 70%) - repirs costs = MAO
Let’s assume, hypothetically, that your MAO on a property, any property, is $120,000. (arv is $200k times 70% is $140k minus repairs $20k equals $120k)If this is what you expect to sell it for, you will need to get it cheaper to make money. This is where your negotiating comes in. Get it for less to make money. What if you offered $111k in writting and added a deadline of 48 hours. If they are as motivated as YOU NEED THEM TO BE, you will get a call.
Now you have a purchase and sales agreement to get signed. Make sure that you find one that is BUYER oriented. As long as you follow the above, I can’t see how you can lose.
good luck to you.