Master Real Estate Deals with the Painless Wholesaling Method

What is going on everyone? This is Nathan Payne. We are live with the weekly batch call where I show you how to use batch leads to crush it in your market, how to do business, how to get deals. Right now with the way that the market's changing, it's so important that you know what a deal is. You know how to use the data from batch to lock up deals, to find the right stuff, to use your time wisely. So right now we're going to talk about today on this weekly batch call, how to determine if you have a good deal. I'm going to show you exactly how to do it. And through the Painless Wholesaling Method, that's why the Painless Wholesaling Method is so legit because if you have buyers that you already work with, you don't only have to just guess and run the comps and think you know someone will offer. You can ask someone, you can ask one of your buyers. So let's get started. Right now I have Sarah on here. Sarah, what's going on?

Hey, how's it going?

Good, good. All right, so let's dive right into it. So you said you're brand new to wholesaling, really green, and you want to implementing and having the strategy so you can make some more money as a unicorn agent, right? So let me ask you this. What do you believe is required for it to be a deal at this moment for you to wholesale? I'm just curious. I want to ask you.

I mean, the price has to be right, right? There has to be enough money in it in order for everybody to be happy and make a deal.

Do you have an idea of what that is? Like, because a lot of people, as they research wholesaling, they have like, sometimes they hear of like a formula that's like 70% minus repairs minus AR. You know, minus your fees, your wholesale price. What have you heard?

I heard now market shift, investors are going down to like, I want to say 60, 60 to 70, but I've also heard at the end of the day, as long as they can make a 10% return.

All right. So you've heard a lot, right? You might be a little confused. Yes. All right. All right. So let me show you what I do so you can kind of have a good idea of how to determine like what your offers, what is a deal. So I call it the painless wholesaling method. This is the blueprint. It shows you steps 1 through 10 on how to get a deal every step of the way. But the way I believe you get started in wholesaling is you have to at first, mindset is really important because wholesaling, it's a roller coaster ride, especially when you get started. Ups and downs, it's getting deals falling through. So you have to be prepared mentally to overcome that. So what's the first thing I tell people? The second step is picking a market. It's really important as you wholesale to pick the right market because if you're in a market that there's not a lot of activity, a lot of flippers, you're not going to have anyone to sell it to. So you got to pick the right market and you can use batch leads. So I show people how to use batch leads to pick their market. You can do cool things. You can check areas, you can pull lists, you can find buyers. Let's just say you were in Flagstaff, right? You'd be like, oh, can I start wholesaling like a ton of deals in Flagstaff, Arizona? Like, is there enough volume? Is there enough cash buyers in this area for me to do deals? So right here you can check if you just go to quick filters, shows you that there's quite a bit of cash buyers, and that means sales in the last year or so. So Flagstaff would be good by the amount you can see. It says recent cash and hard money loan purchases of real estate. So that have automatic filters. It's really easy to determine, like, if there's activity, if you're in a major metro, because if you're in a major metro, I'd say 99% of the time, like, there's activity just because there's a lot of people living there. If a population is big, that means that there's a lot of people moving there. But if you live in a place that's a little not populated, it's like 50,000, 100,000, that just means there's less movement, less people moving in and out of the state. That's like a general rule of thumb. So the next step after picking your area is you want— my goal And what I tell people is do not just automatically or immediately just go start marketing and just calling sellers and trying to get a deal because you still are at this point, you've picked your market, but you don't know what people are buying. Markets differ all over the country. So you need to be able to understand your market and what people are buying. So the next thing I teach, and this is why I call it the painless wholesaling method, is I teach you how to network first to find your cash buyers. Once you understand and have about 5 to 10 solid relationships, then you can with confidence go out and start making offers. You can talk to sellers. So if you go to my mind map, I show you exactly how to run comps for wholesalers. So there's some really easy ways to do it, but let's go to step 1. So how to find comps. All right. So I use Batch Leads. I like Batch Leads a lot because it gives you a good idea of comps. You can just type in the address you want. Let's just look at this one. It gives you an estimated value. It runs an algorithm. Right? Like most of these softwares, it tells you an estimate idea. So you get a good idea just immediately, like, okay, what it's worth. Even Quickly does comparables and it checks a radius within a year, square footage. It does all that. And it shows you a bunch of different comps. So that's a quick way to do comps like immediately is just with batch leads. So the next one is Zillow. And then obviously MLS data trumps all. It's the best way to find comps. So that's how you find the comps. So you want to determine the ARV after you find comps. In order to start the process of like, okay, what is a good deal? You need to find out what is this house I'm looking at? What is it worth if it's at the top of the market, right? Or it's fully flipped. So the best thing to do is find flipped comparables. If you're just finding a bunch of homes that haven't been flipped, it's going to be difficult to determine what it's going to be worth if a flipper goes in there and makes it really nice. Do your best to find comparables. The next thing that's important after finding the ARV So let's just say, for example, ARV, you find a house that's worth $200,000 and you know, it's worth $300,000. So that's the ARV is $300,000. Now you got to determine, okay, they're giving it to me at $200,000, but how much repairs does someone need to put into it to get it up to $300,000? Right? Here's some questions to ask. So this says, are you working with a seller virtually, or are you working with someone in your backyard? This tells you how to navigate if it's virtual, what questions to ask and how to get pictures. So this is the easiest way to determine a light, average, or heavy repairs. So it says square footage of a house. For example, is 1,000 square feet times the cost of the light. If it's light, it's $18 per square foot. If it's average, it's $24. Or if it's heavy, which means down to the studs, you gotta do the whole thing, it's $40 equals your rehab cost. So for example, if you have a 1,000 square foot house that just needs carpet and paint, probably gonna cost $18,000 cuz you're doing 1,000 square feet times $18. Very easy. Didn't need to go dive in deep into like a full rehab estimate spreadsheet. I just need to know square footage. Is it light, average, or heavy? And if you're like, well, what makes something light, Nathan? Well, right here, if you don't have to touch the cabinets or the bathrooms and all you gotta do is carpet, tile, paint, carpet, or flooring, it's usually light. It's a light rehab. If you have to start venturing into bathrooms and cabinets and kitchens, then you're talking an average rehab. If you gotta do everything from a gut job, we're talking windows, everything, it's 40, and that's like a gut job. And these are average numbers, right? It could go up, it could be lower, but I would say 40, 24, and 18 are good. So if If you're talking to a seller and you're like, hey, you know, I'm interested in buying your house and tell me a little bit about the property. You're like, has the kitchen been updated in the last 5 years? No, it hasn't. Okay. How about the bathrooms? Have the bathrooms been updated in the last 5 or 10 years? Yeah, we just updated them last year. Okay. So I don't have to worry about the bathrooms, right? Then you're like, okay, kitchen, yes. Bathrooms, no, those are okay. And carpet and paint. So you're right in between like an 18 to 24, because you're not having to do the bathroom. So again, really easy to determine what you need to get a property for. ARV. What is this property worth flipped? How much do my repairs need to be? Now we've gone over both. You've looked at flip comparables. You know that it's worth $300,000. You know that this house in this example, it's 1,000 square feet. It needs $24 per square foot in this example, $24,000 rehab. So you have the rehab and you have the ARV now. Okay. So that's two parts of the formula. And then now you calculate your offer that you can buy it at. And the way I do it is depending on if I'm talking to an analytical buyer, Or sorry, seller. I sometimes even show them my rehab calculations and be like, hey, this is why I have to be here. Cause I got to make some money, but determining everything we talked about, I can resell for $300,000. I got to put in $24,000. I need to make $20,000, $50,000. I hope you understand I'm a business. I sometimes walk people through my numbers so they understand why my offer is $150,000 less than what they believe their house is worth. This is the quickest way to determine if you're talking to a motivated seller is forget all this noise, all the stuff I just showed you, look up someone's house on Zillow and offer them 50% of their estimate. That's the easiest way to determine if you have a deal, because if someone doesn't get off the phone with you, then obviously you have someone that you can work with, right? Another quick way to do it is 70% of the ARV. All you do is you find the ARV and you could do this formula. So let's say the house is worth $300,000. You say, okay, 70% of that minus— we talked about $24,000 in repairs minus my wholesale fee. I want to make $15,000. $171,000. If I offered $171,000 to the seller and they accept, I'm going to make at least $15,000. The flipper will have his costs of $24,000 in there. And then the profit expenses of the hard money, all that stuff is calculated in the 70%. That's what the 70% is. The 70% includes the 6% in commissions and fees for relisting it. It also includes the closing costs, the profit. So one thing that everyone needs to know that's watching this is do not waste your time running comps on a property where you don't have the seller on the phone. Complete waste of time. Well, that was it, everybody. I hope that was helpful. All right, we'll sign off. Later, everybody.