OfflineHello,
I have located a property (condo, 1 bd, 1 bath, decent area). The asking price is $80K. The appraisal on the condo is $200K (from the 2008 tax appraisal).
The owners of the condo are investors and are wholesaling the property. That is their reason for selling.
I have a developed a buyers list. As such I have contacted one investor who maybe be interested in buying such a property. He has asked me to sign a wholesaler agreement.
Now how do I proceed here? It's a stupid question but I am unsure what part I can play here for a decent profit.
1. What is wholesaling?
2. Do I just connect the two and obtain a finders fee if the condo is what the buyer wants.
3. Because the owners are wholesaling the property can I wholesale the property too? For example because the owners are asking $80K can I wholesale it for $90K or $100K. Is that even ethical?
4. Do I not even attempt to wholesale and state that my fee is $5K, $10K, $15K
What can I do to make this work so that it is a win-win-win?
Any help will be welcomed here.
B
First, you need to get the fair market value on the condo. The 2008 tax appraisal means nothing. Look at the tax appraisal as potential for your future return. What you need to do is find out what condos have sold for in the past 90 days. If you can, try to keep your radius 1/4 to 1/2 mile not more than a mile or two. You want to compare sq ft, bedrooms, bathrooms, year built, HOA fees, etc. You want to try to have 6 good comps. If most of your comps are around 80K, but you have one at $120K and another at 40K, throw those two out and use the other ones. Average the rest and this is your FMV. You want to pay at least 30% below this figure to make it a deal. If the seller is asking $80k and that is the FMV, you have no deal. If you plan on wholesaling the deal then you want to offer even less, so you can add in your fee. Hope this helps.
KimmyJ
Thank you. This was good.
I am unable to find sold comps for the address/neighbourhood which probable is not a good thing. In addition current condos that are for sale are for $80K and $50K which really isn't good.
Ah well...I must keep on moving....
Thank you KimmyJ.
Are the sellers firm on their price? You can find comps from zillow.com or trulia.com or realquest.com If you can't find comps within 90 days then go back 6 mos. You have a lot of options. If the sellers are willing to be negotiable on terms you can do a lot of things.
I had gone to zillow and trulia. A lot of the condos in this area have gone through foreclosure and current asking prices range between $49,900-$79,500. Have not been able to see sold prices. There were no sold comparables to check against. Nothing is coming back in zillow, trulia or realquest for sold comps.
I do know the sellers are willing to do owner financing with 10% down. With the sellers wholesaling, I'm guessing they got it at a good discount if it was a foreclosure. They are marketing it's value based on the tax appraisal but based on what the asking price is, it is between $49,900-$79,500 and not higher than that.
This being the case how could this benefit my end buyer?
to add, you gotta remember if you are going to wholesale the property again to someone else, you need to lock the deal up first, otherwise you would be bird-dogging.
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