The ULTIMATE OFFER Formula for Wholesaling Real Estate! (Day #13)

TL;DR

Learn how to calculate the perfect offer price for wholesaling real estate using the ARV minus repairs formula, with an average discount rate of 83%.

Transcript

the perfect offer formula for wholesaling real estate what is up guys zak in here and in today's video i'm gonna share with you the only offer formula you're ever gonna need for wholesaling real estate and i'm excited to share exactly how to give the perfect mao the perfect offer price how to find arv repair costs guys i'm gonna share all that abso... Read More

Key Insights

• 🤲 Wholesaling real estate involves getting a property under contract and selling the contract to a cash buyer.
• 💯 The perfect offer price can be determined using the ARV minus repairs formula.
• 😘 Negotiating with the seller is important to get the lowest price possible.
• 😷 Asking the seller how much they need to sell the property for can provide valuable information for negotiations.
• 😘 The 70% rule is outdated and may result in offers that are too low for profitable wholesaling.
• 💹 Repair costs can be estimated by comparing similar properties and using formulas or charts.
• ☠️ Different types of cash buyers may have different discount rate preferences.

Questions & Answers

Q: How do you calculate the perfect offer price for wholesaling real estate?

The perfect offer price can be calculated by subtracting the estimated repair costs from the after market value (ARV) of the property. Multiply this amount by the discount rate most suitable for your type of cash buyer (e.g., 83% for average cash buyers).

Q: What is the advantage of asking the seller how much they need to sell the property for?

Asking the seller for their desired selling price can provide valuable information. If the price is too high, it allows you to negotiate downwards, but if it is lower than expected, it could result in higher profits.

Q: How do you determine the repair costs for a property?

Repair costs can be estimated by looking at similar properties in the area and considering factors such as square footage and the condition of the property. Various formulas and charts are available to help estimate repair costs.

Q: Why is the 70% rule not recommended for wholesaling real estate?

The 70% rule was suitable when real estate prices were lower, but with inflation, it may lead to offers that are too low for profitable wholesaling. Using an 83% discount rate allows for better profit margins.

Summary & Key Takeaways

• This video explains the process of wholesaling real estate, which involves getting a property under contract and selling that contract to a cash buyer for a profit.

• The key to successful wholesaling is finding the right offer price, which can be determined using the ARV minus repairs formula and a discount rate based on the type of cash buyer.

• It is important to note that the offer does not need to be perfect, and negotiating with the seller is crucial to getting the lowest price possible.