Straight answers
Wholesaling FAQ
The questions that come up on every deal — the 70% rule, ARV, repairs, dead flips and the retail buyer exit — answered short, with the math where it matters.
Wholesaling basics
What is wholesaling real estate?
Putting a house under contract at a price low enough that somebody else will pay more for it, then either assigning that contract or completing the purchase and reselling. The wholesaler is paid for finding and pricing the opportunity.
What numbers decide a wholesale deal?
Five: the after repair value, the repair cost, the cost of sale, the fee you need, and the exit — who the finished house is sold to. The exit is the one most people never question, and it moves the offer the most.
How much should a wholesaler make per deal?
Around $10,000 to $15,000 on a typical assignment. On a retail-buyer exit it is usually larger, often $20,000 to $35,000, because the finished house sells closer to full market value.
Do I need a cash-buyer list?
Not for the retail exit. Retail buyers with financing are the largest buyer pool in any market and they are reached through the MLS instead of a short investor list.
The 70% rule
How does the 70% rule work?
Maximum allowable offer = (ARV x 0.70) - repair costs. On a $250,000 ARV house needing $30,000 of work that is $145,000; a wholesaler subtracting a $10,000 fee gets $135,000.
What does the 30% cover?
Holding costs, closing costs, selling costs and profit — all four in one flat number, which is exactly why it is wrong on most specific houses.
Should I ever use it?
Use it to sort a list in ten seconds, and to predict what your competition will offer. Never use it as your own offer.
What replaces it?
Total expenses = commissions + repairs + concession credit + closing costs. Maximum allowable offer = projected sold price - total expenses - your profit goal.
ARV and repairs
How do you calculate ARV?
Average the sale prices of at least three comparable homes sold in the last six months, within about a mile, with similar size and bed/bath count. ARV = sum of sold comp prices divided by the number of comps.
How do you estimate repairs without a contractor?
Square footage times a cost per square foot tied to condition — light cosmetic, dated but functional, or gutted. A 1,500 sqft dated house at $20 per square foot is $30,000.
Is ARV the same as an appraisal?
No. ARV is your comp-based estimate. An appraisal is a licensed opinion, and a lender only lends against the appraisal.
Dead flips and the retail buyer exit
Why do so many flips die?
Because the numbers were run for a cash investor exit, which caps the purchase price at roughly 70% of ARV minus repairs. The seller's price is above that ceiling and both sides walk.
What is the retail buyer exit?
Selling the finished house to an owner-occupant using FHA, VA, USDA or conventional financing. They pay close to full market value because they are buying a home, not a margin, so the deal supports a much higher price to the seller.
How much more can I offer with it?
Commonly $40,000 to $50,000 more on a $250,000 ARV house, depending on repairs, commissions and closing costs. The calculator gives you the exact number for your deal.
Is there a seasoning requirement?
FHA restricts resale by the seller of record within 90 days, which is why the method is built around repairing and listing rather than a same-day assignment. Conventional, VA and USDA buyers are not subject to that FHA rule.
The calculator and pricing
Is the calculator free?
Yes. Running calculations is free forever and needs no account. A free account keeps one saved property.
What does RBP Pro cost?
$9.95 a month, or $8.25 a month billed annually, with a 7-day free trial that needs no card. Pro adds unlimited saved properties, what-if scenarios, deal comparison and shareable reports.
Is this financial advice?
No. Results are estimates for education only, not financial, legal or investment advice. Verify comps, repair costs and closing costs for your own market.
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