Real Estate Wholesaling: The ARV, The Formula, Finding Motivated Sellers and Buyers

     Motivated sellers, who are these people and how can you find them? Motivated sellers are people who are looking to sell a property quickly, these people have unwanted properties, land, inherited properties and such, that they don't want. Some of them are living elsewhere and don't know where to begin getting rid of their property. Some people are behind on taxes and mortgage. That is where you come in, you hold the marketing materials to let the world know that you are here to help them with this issue. Your marketing material should include signs, brochures, business cards, flyers, and a website. You can purchase extra things like t-shirts, and mouse pads for your personal use, to let your business name be seen. It is your job as a business owner first to let the public know what your business does. If you go with signs, you can start just by looking around your own neighborhood. There are other investors that post signs that say, "we buy houses', "we buy ugly homes", "sell your house today", you can come up with your own personal saying that fits you, and roll with it. Be sure to add a call to action and your number so they can reach you. There are different places you can post signs, be sure to check with your city to make sure you won't get into any trouble when posting the signs. Some cities frown on it, they think of the sign as litter, we think of them as potential. You can also post ads on Craigslist, create digital flyers and use them as pictures for your ad. To find buyers for your property once you have gotten it under contract you can follow the same marketing steps you did to find the sellers, just post the property you have for sale and go from there.

     The ARV, if you're just getting started in real estate investing then I am sure you know what The ARV is right? Then again, let us break it down, the ARV is the after repair value of a property. It is the price that the property is worth when it is in tip-top shape. Before making an offer on a property you want to know how much you can get once you fix the place up. Whether you are flipping the property for your own profit or if you are assigning the property to another person, you will want to know what the ARV of the property is. To find the ARV, you can compare prices through websites like Zillow, Trulia, or HAR. You can also use the tax assessor's site to get the appraisal price, you can use that, but keep in mind that the property is appraised in an as-is state so you won't get the exact amount of what you can sell the property for if you plan to fix it. You will want to use the best price listed on these sites since you want to get the most from your property. Once you have found the ARV you can begin to calculate how much you should offer on the property using the formula. The formula, this formula is used by any and every real estate investor that you will ever come across and I am sure it will continue to be used from here until eternity. It is probably used when purchasing and actually flipping or negotiating a property in any sort, but who knows, I can only speak for investors. So here goes, the grand formula....ARV x .70 - repairs- your fee, this is the formula you use to get the best deal, I have found that some investors use .60 and they will double their fee, depending on the ARV, it is really up to the investor on the formula he or she wishes to use. The more you use the formula you will begin to see ways to tweak it yourself to make it work for you. I suggest you work with either .70 or .60 in order to get a good deal, anything else would be uncivilized. In the end, the formula you use will determine how much you will make on each deal so choose wisely, use your intuition and follow your first mind. ok so let's use the formula in an example. Someone contacted you with a property that they want 28,800 in its as-is condition, sometimes this is good, but you still want to check your formula to see if this is a good deal,  you find out the property has an ARV of 100,900 so here is your formula at .70, (ARV) 100,900 x .70-30,000(repairs) - 10000 (your fee) = 30,630 that would be the max price that you would offer for the property. If you use .60 your price would be 20,540 so now you see why some investors use .60 because the key is to get the best deal which is the lowest price to purchase the property. You want to remember to buy low and sell high, that would be something to remember in all purchases you tend to make money on, this rule applies to every business also.

      You as the wholesaler has the opportunity to set your price per deal, it is your goal amount that you wish to make for your services and actions in each deal. so depending on the amount of the property you can set your amount at a minimum of 2000 and a maximum of 50,000, depending on how much the property is worth. I myself, I don't turn down a deal, I feel that I can help anyone and make any amount I want, but I look for deals that I can make 10,000 or more on. That doesn't mean that I don't take deals where I would make less than 10,000. The more you get into real estate the more you will begin to see ways to tweak your business to fit you. Look for our upcoming classes on wholesaling visit http://ezproperties.weebly.com, We are also hiring for property locators if you are interested in an opportunity to get into real estate sign up and we will contact you within 24 hours!