10d ā¢ Wholesale Terms š
š Bag Season ā Real Estate Terms (Know This)
š ARV (After Repair Value)
What the property will be worth after itās fully fixed up.
Used to calculate offers and profit.
Example:If a house sells for $200k fixed up ā ARV = $200,000.
š° MAO (Maximum Allowable Offer)
The MOST you should offer a seller while still leaving room for profit.
Basic formula:
ARV Ć 70% ā Repairs = MAO
This protects you from overpaying.
š 70% Rule
A quick rule wholesalers use so buyers can still make money.
Example:
ARV: $200,000 Repairs: $40,000
200k Ć .70 = 140k \\140k ā 40k = $100k MAO
You should try to get the deal under $100k.
š Comps (Comparable Sales)
Recently sold properties similar to yours (same area, size, condition).
Used to determine ARV.
You want:ā¢ Same neighborhoodā¢ Similar beds/bathsā¢ Sold in last 3ā6 months
š¤ JV (Joint Venture)
When you partner with another wholesaler.
Usually:ā¢ One brings the dealā¢ One brings the buyerā¢ You split the assignment fee
Example: $10k profit ā $5k / $5k.
š Assignment Fee
Your profit for putting the deal together.
Buyer pays this at closing.
Also called:ā¢ Wholesale feeā¢ Finderās fee
š· Assignment Contract
The agreement that transfers your purchase rights to the end buyer.
This is how wholesalers get paid without buying the property.
š§¾ Purchase Agreement
Contract between you and the seller locking up the property.
This is step ONE in wholesaling.
š Repairs
Estimated cost to fix the property.
Includes:ā¢ Roofā¢ HVACā¢ Electricalā¢ Plumbingā¢ Kitchen/bathā¢ Paint/flooring
Always overestimate repairs to stay safe.
š§ Motivated Seller
Someone who NEEDS to sell due to:
ā¢ foreclosureā¢ divorceā¢ inheritanceā¢ tired landlordā¢ vacant propertyā¢ financial stress
These are your BEST deals.
š Follow-Up
Contacting sellers multiple times over days/weeks/months.
Most deals happen on FOLLOW UP.
š§āš¼ Cash Buyer
Investor who buys without bank financing.
These are who you assign deals to.
š Exit Strategy
How you make money:
ā¢ Assignā¢ Double closeā¢ JVā¢ Wholetail
Always know your exit.
š Earnest Money Deposit (EMD)
Small deposit to show seller youāre serious.
Usually $10ā$500+ for wholesale deals.
š§ Dispo
Short for disposition.
Selling the deal to your buyer.
Opposite of acquisition.
š§ Acquisition
Getting the deal under contract from seller.
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š Bag Season ā Real Estate Terms (Know This)
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