I run a wholesale business that does around $800,000 each year and we make dozens of offers every single week. But you'll never catch me, my business partner, or any of our staff crunching numbers in a dark room doing calculations. Because we've developed a stupid simple process for calculating offer price that allows us to come up with an accurate number in five minutes.
And today... I'm going to expose it. After watching this video, you'll be able to make precise data-driven offers based off solid facts, not inflated renovation costs or speculated investor profits. This approach will lead to significantly higher assignment fees, closing on tens of thousands of more dollars every single month.
Now, before we dive into my method, let me tell you what this is not going to be. This won't involve you doing the typical formula, ARV times 0.7 minus renovation costs, minus your assignment fees, your MAO, or some special calculator that spits you out your magic wholesale number. This system was built so that even a fifth grader could run numbers if they really wanted to. All right, so for this example, I'm going to be over on the south side of Chicago. And I'm going to be using an example of a frame single family home that's two stories.
It's going to be a full gut renovation, full unfinished basement with a two car garage. And it's going to be on the south side on South Vernon Ave and 78th Street, East 78th Street. So here on Redfin now. I'm going to clear all of this stuff while I already box this out. So the first thing that you want to do, you want to identify the pocket that your subject property is in.
So again, for instance, the property or the example that I'm giving you guys, this property is on South Vernon Ave on East 78th Street right here. So notice how I have these main streets right here. That makes a huge difference.
I'm not crossing railroad tracks. I'm not crossing main roads. I'm not crossing highways.
I'm not crossing rivers or any of that stuff. I'm sticking to this pocket specifically because each neighborhood varies. Price to price, house to house, it varies.
So I want to be as accurate as possible by only looking in that pocket. So we're here in this pocket. The filters that you're going to want to use is going to be sold.
And for this example, I'm just going to do a year back. But keep in mind, the market right now compared to a year ago is very, very different. So typically, you want to start off at the three-month mark.
But just to kind of speed things up, I'm just going to go to the year. But typically I would be starting at one week. Okay, what do we have? One month. What do we have?
You know, three months, six months to a year just to figure out all of our options, just to really estimate the best offer price possible. So again, for this example, I'm going to be doing sold within the last year. It's a single family home. So I'm going to go house and I'm just going to make sure all the other filters are good to go. Bed bath count, not going to do anything there.
I know I mentioned something about a garage. Sometimes realtors do not put that in the description, so I'm not going to do that. Really, all I'm doing is looking houses, single-family homes that sold a year back, and yeah, that's pretty much it, and looking for single-family homes. Now that all of that is good, I'm going to go from price low to high.
Again, the subject property, the example that I'm giving, it's a frame single-family home that is two stories. It's going to be a full gut. It's got a full unfinished basement and a two car garage. Keep that in mind.
We're trying to find something that is in that similar condition. So I know what investors are paying for, for properties like this. So off the rip, a frame, single family home, a frame, single family home.
What else? This is a brick single family home. Keep in mind a frame house like this one here compared to a brick house.
Brick is more valuable. Don't ask me why. It just so happens to be more valuable.
It's like gold to silver almost. Keep looking, keep looking, keep looking. All right, so here's another frame one.
I know this one's brick on the bottom and framed on top. This is just a brick bungalow, so I'm not really gonna be using that as an example. So let's dig into this. So we got this one here that looks like a full gut.
This one here that kind of looks like a full gut. Reason why I'm saying is because the prices are so low. We're looking from low to high right now, guys. And these two are the same properties.
Oh, no, no, no, no. And yeah, so immediately off the rip, I want to click on this one. Let's take a look here.
So yes, this is a full gut. This is going to be a full gut. Just based off of looking at the pictures off of first look and just the experience that I have, I can just tell this is definitely, definitely probably going to be a full gut. Just looking at how dated everything is, the floor looks all messed up.
You know, that doesn't look like it's really being used currently. The floor is not looking too good there, there. Basement doesn't look too hot either.
And yeah, the only thing that I did not see was if it has a two-car garage. Now we can go to the description, go down here, parking. Yeah, garage for two spaces. Solid.
So it has a two-car garage. It looks like it has a full unfinished basement. Two beds, one bath. 900 square, 900, 900. square feet and this sold for 51,000. So this is kind of helping us come up with an idea of what we're able to offer.
It looks like this investor, now how do I know it is an investor that bought it? It should say here something about, okay, yeah, cash offers required. Cash offers required. Most of the time, only investors are offering cash offers.
And by the looks of it, it doesn't look like any mom and pop home buyer is going to be ready to move in here. So I can definitely assume that an investor paid for this, and it's probably going to be fixing it up. So let's keep that one in mind.
Let's go back to this tab here. We got this one right here, another frame, single family. Now, there's things that you got to be picking up on here. That last one that we looked at was a two bedroom, one bath, only 900 square feet. This one is a four bed, two bath, 1800 square feet.
Now, how can we tell if this is an investor or not? Well, there's no description in here. Let's look, two car garage.
Let's look at some more of the description. Go to interior. Basement, full basement, partially finished. Okay, so that's a good thing to keep in mind.
It has a partially finished basement, but it has the garage. It has the garage, full unfinished basement or partially finished basement, and it's a... single family home.
So I want to be able to see the description. Now, one thing that you can do is you can take the addresses to other websites like Redfin, like this one, Zillow, Realtor.com, things of that nature. And you're able to see if there's potentially a description on one of these ones. So let's take a look here.
Go down. I might've missed it. Investor special. Consistently paying tenant occupied in place for beds partially finished basement an additional living space properties being sold as is so I know that you know this is an investor who paid for this now obviously there aren't pictures but it says consistent paying tenant who is occupying it currently so this is a livable property keep that in mind we're talking about our subject property is a full gut renovation it needs a full guy needs everything now when I say full gut I mean it needs electrical done plumbing done HVAC done it needs everything done you need to update everything within the house this for instance looks like it is not going to be a full gut so definitely definitely keep that in mind but another thing to note is that some investors, when they're going into properties like this, where it is currently livable, but they're a fixing and flipper, or they are a landlord, for instance, but they want to do a renovation, they're still going to come in here and redo everything.
They're going to rip out the old galvanized plumbing to put in copper. They're going to rip out the boiler and all that stuff and put in a furnace, and they're going to put in central AC. They're going to reduct the entire house.
So that is one thing to keep in mind. Obviously, we're only able to assume as we only know so much. this description, but we have those two right now.
Let's keep looking though. Let's go back to this tab here. So we've got one, we got two, kind of around the same price, a little bit bigger houses.
This one is probably a thousand square feet more, and it's sold for about 14,000 more. But it is also partially, it is livable currently with a paying tenant in there. So that is some value there. I do just want to take a look at this one. I know this is a brick one, but just to help give yourself more of an idea of what you could be offering.
So I can tell you for sure, for sure, this one is a full gut. I mean, look at the pictures. It's a brick, single family home, two stories. If this is going to load for me. And just based off of looking at the pictures, I mean, there's nothing in here other than the framing.
Or is there electrical that's in here? Looks like they do have some electrical in here. I can't tell if it is all wired through or not. I don't see, looks like there is some plumbing right here.
Obviously, might not be fully finished just yet, but it looks like they got a lot of the electrical conduit done. And I don't see any HVAC going throughout. I can't tell if that is new or old right there or not but nevertheless nonetheless it's definitely a full gut still I mean there's a lot that needs to get done here like literally everything other than maybe a few of the mechanical things so seven sold for 75,000 definitely definitely something that I'm going to keep in mind for my price.
But let's keep looking. Let's keep looking. So we have those three options right now.
We got 51, 65, 75. This is a full gut, but it is brick. So you got to keep that in mind. And let's keep going through. I don't think this is one.
Nope. This one is a brick. Let's keep going through.
This one is a brick bungalow. Brick bungalow. Oh, brick two story.
Let's see what this is talking to us. This one sold at 105. We've been in a bad and close porch. Updates Proper being sold as is there's only two pictures.
I can't really tell if this is a full gut or not It's not mentioning anything about tenants or anything like that So I don't plan on using this one as an example, but I'm gonna keep in mind Okay, there's something like this will for 105 to an investor What about this one here Not a full gut completely livable and it looks like it was kept up pretty well And then I do want to take a look at this one for sure. So those are those are the ones that we're working with. We got this one, we got this one and we got this one and they're all getting sold relatively around the same price.
Now, obviously, this one is a lot smaller. This one's, you know, a thousand square feet more than this one damn near. And then this one is a brick single family two story and it's sold for seventy five. So we're keeping all of that in mind right now.
Now, another thing that I really, really do like to do is I like to go from high to low now. So that's a framed single-family home. A framed single-family home that is two stories. Let's take a look at it. Obviously, this is fully fixed up, like brand spanking new.
True gem, luxurious. Does it say anything about a brand new renovation? Yeah, see, look at this.
All plumbing, electrical, and HVAC systems have been completely updated. In order to update all of those mechanics, it's a full gut. This was a full gut property that sold for $275,000 after repair.
So we can confidently say, you know, that... after repair value is about 275 potentially. Got about 2,000 square feet.
So that's all good things to keep in mind. Now, one last thing that I want to show you guys is to go down to the price history. And let's see, what did the investor do?
paid for it. So they bought this, they fixed it up, they did a full gut renovation on it, and now they sold it for $275,000. Let's see what they paid for it. They paid about $85,000 back in 2022. So keep in mind 2022 to 2024 is definitely a different market, but this investor paid about $85,000 for this one. So we have somebody who paid, let's go back to this one.
We have somebody who paid $85,000 for their full gut. two-story frame single-family home with a basement. Now, one thing that I didn't check, does it have a garage?
It doesn't have a garage. It doesn't have a garage. Interesting. Interesting.
So this one does not have a garage, as you can tell right there. Now going back to this tab here. So that's kind of what we're working with right now.
We got one that was bought for $85,000 without a garage. Everything else matches the characteristics of the subject property. All right. So now that we have these three right here, we got this one that sold for $75,000, this one that sold at $65,000.
and this one that sold at 51. So what is this telling us? Investors in this area for a frame, two-story single family home with an unfinished basement and a two-car garage are selling around these prices not here. Now you got 51, you got 65, you got 75, you got somebody that paid $85,000 back in 2022. What offer do you choose?
What should your offer price be? Well, I like to play it safe. I really do. And like I said from the beginning, this should be able to get you way higher assignment fees.
So me looking at the lowest one right here, I'm probably going to be wanting to be right around $45,000 to maybe even upwards to $50,000 just because this house is so little with one bathroom and two bedrooms. All right. So now that we know that our offer price is going to be about $45,000 and we might be able to come up to $50,000, let's just run it all back just to refresh your memory.
So again, the first thing that we're going to do, we're going to keep in mind of the characteristics of the subject property. Frame, two-story, single-family home. It's going to be a full gut renovation.
It needs everything done to it. It has a full unfinished basement. It has a two-car garage in this exact pocket specifically on South Vernon and East 78th Street. So again, you're going to want to take the little drawing stick on Redfin or Zillow, doesn't really matter. Mark this all out.
Don't want to cross any main roads. whatsoever. You're going to go to sold. You're going to look starting from a week to one month, three months, six months to a year, just to give yourself an idea of what is going on in the real estate market in this area within the last year or so.
So I'm looking back about one year. And again, I only have, I have the subject properties, a single family. So I want to be looking at houses only. And those are your filters.
Start by going low to high. Try to see what the as is comps are selling for. We got 50. 61, 65, and we got 75. And then we also want to look at ones that are from high to low.
So we're going to see this one right here. That is basically our ARV. Our ARV is 275. And we know...
that they paid about $85,000 for this, a full gut renovation back in 2022. So that's everything that you're gonna be doing in order to get your offer price. Now, if you're not able to get results like this on Redfin or on Zillow doing it this way, looking from sold, let's also go ahead and look at the ones that are for sale currently. So let's take a look. So all you'll do in the filter section is you'll change it from for sale, from sold to for sale. And you also want to click under contract pending just to see what is currently pending on the market.
Let's go from low to high again. we got one contingent at $50,000. Got one contingent at 89. And again, these are contingent. These offers, they can be higher, they can be lower.
We don't know what the sale is just yet. Got this one right here that is contingent for about $89,000 or $90,000. Is it contingent? Yeah, it is contingent currently.
That's a frame. Oh no, that looks, it's a brick. Brick, two-story, single family home.
This one was a brick bungalow. Brick bungalow. This is a framed two-story, but it looks a little bit fixed up and clean.
These ones are all contingent. Let's take a look at this one. It's on the market for $219 right now, but that is a brick bungalow.
A little bit different than what we're looking at. So yeah, you'll also want to do this if you're unable to find those matches in your search. Now that you found your offer price and hopefully had it accepted, you still need to find a cash buyer.
I have a video breaking down a strategy for finding cash buyers that I see nobody talking about right now. So you might want to check that out while you're still early. Thanks for watching.
Deuces.