Posted by SCook85 on April 16, 2001 at 18:32:59:
The first thing that you need to do is determine what the homes are worth after they are fixed up. Without knowing this you will not be able to effectively negotiate with the sellers.
Once you know the values of the homes you then need to talk with the sellers to see if they even want to sell, and then determine the amount of repairs that the home needs.
Once you know the value of the home and the amount of repairs you can determine the maximum amount that you can offer. My formula is After repair value X 70 % less repairs = my offer. I do not use this formula on lower end homes (less then $75k). If the homes are worth less then $75k after repairs I would consider lowering the 70% figure. I would make sure that you keep at least $20k in the deal for profit and holding costs. Since your intent is to wholesale the properties you need to lower your offer by the amount of money that you want to make. This gets you your profit and still leaves a good deal on the table for your buyer.
I hope this helps.