Good morning all,
This morning I would like to discuss “The Two MOST important Things You Need To Know To Be A Successful Home Flipper or Wholesaler”.
I have done a considerable amount of research on the educational programs that are being sold in the market, and most of them have some really great information about marketing, how to get seller leads and how to build a buyers list, how to negotiate, etc…
However….I have noticed that a majority if not all of them do not spend much time on (and some spend no time on) what I feel are the TWO most important things to become a success in this business.
Flipping homes or wholesaling for that matter comes down to a very simple equation.
After Repair Value (ARV) – Purchase Price – Repairs costs/Holding Costs = Profit or Loss.
To insure the last part of this equation is a profit and not a loss as well as an acceptable profit margin, you need to be able to accurately determine a couple of very important things….Repair costs and your after repair value. Determining these two factors are the most important and basic tools you need in this business. It is also very important to be able to do this with ninja quick speed.
You can put up thousands of bandit signs or mail thousands of yellow letters and have hundreds of seller leads coming in, however if you can not accurately and quickly determine the ARV along with a rough estimate for repairs you will constantly spin your wheels chasing deals with no real target and minimal success. Conversely, if you can quickly assess a property, its value and the cost to repair, you can very easily determine a price to offer or whether or not the seller wants too much for the property or even better if they are asking way too low. If you are able to identify a screaming deal quickly you will not only be able to fully commit with no hesitation, but you will have wholesale buyers fighting over themselves to buy your property for a huge mark up and give you a non refundable cashiers check with a close of escrow within days.
Therefore, before you all start working on building your multi million dollar wholesaling empire. I suggest you start with a grass roots approach and really focus on understanding how to estimate the retail value or ARV as well as understanding your construction costs.
I have been a certified residential appraiser for over 13 years, therefore I have an ability to value a property with Ninja quick speed and accuracy. I have also trained dozens of other appraisers and investors in the community on how to evaluate and assess the estimated retail value of properties. If you go to my blog at www.win-wintransactions.com/blog/
, I have a great blog from last year called:
“Blueprint For Determining a Retail Value For Your Flip”
This will give you a good basis of knowledge to understand how underwriters and appraisers think and approach valuing homes.
Stay tuned…tomorrow I will be going in depth into estimating your rehab and how to strategize to gain a good solid knowledge base of the construction industry and costs.
Thanks and have a great Hump Day!!!!