Wholesale Deal Analyzer Formula

Understand the math behind the wholesale deal analyzer. Each variable explained with a worked example.

Use the Wholesale Deal Analyzer

Formulas Used

Your Maximum Offer to Seller

maximum_offer = max_offer

Contract Price to End Buyer

contract_to_buyer = max_end_buyer_price

Your Assignment Fee

your_fee = assignment_fee

End Buyer Gross Profit

end_buyer_profit = investor_profit

Offer-to-ARV Ratio

deal_to_arv = arv > 0 ? (max_offer / arv) * 100 : 0

Variables

VariableDescriptionDefault
arvAfter-Repair Value (ARV)(USD)300000
rehab_costEstimated Rehab Cost(USD)35000
investor_profit_pctEnd Buyer Desired Profit(%)15
selling_costs_pctSelling Costs(%)10
assignment_feeYour Assignment Fee(USD)10000
investor_profitDerived value= arv * investor_profit_pct / 100calculated
selling_costsDerived value= arv * selling_costs_pct / 100calculated
max_end_buyer_priceDerived value= arv - rehab_cost - investor_profit - selling_costscalculated
max_offerDerived value= max_end_buyer_price - assignment_feecalculated

How It Works

Wholesale Deal Analysis

Wholesaling involves getting a property under contract at a low price and assigning the contract to an end buyer for a fee, without ever purchasing the property yourself.

Formula

Max Offer = ARV - Rehab Cost - End Buyer Profit - Selling Costs - Assignment Fee

Key Concepts

  • Assignment Fee: Your profit, typically $5,000 to $20,000 per deal
  • End Buyer Profit: The flipper or investor needs enough margin, usually 15-20% of ARV
  • Selling Costs: Commissions, closing costs, and holding costs, typically 8-12% of ARV
  • The deeper your discount, the easier the deal is to assign

    • Making the Numbers Work

    If the max offer is too low for the seller to accept, the deal does not work for wholesale. Not every property is a wholesale candidate.

    Worked Example

    A property with $300,000 ARV needs $35,000 in rehab. The end buyer wants 15% profit and selling costs are 10%. You want a $10,000 assignment fee.

    arv = 300000rehab_cost = 35000investor_profit_pct = 15selling_costs_pct = 10assignment_fee = 10000
    1. 01End buyer desired profit: $300,000 x 15% = $45,000
    2. 02Selling costs: $300,000 x 10% = $30,000
    3. 03Max end buyer price: $300,000 - $35,000 - $45,000 - $30,000 = $190,000
    4. 04Your max offer to seller: $190,000 - $10,000 = $180,000
    5. 05Offer-to-ARV ratio: $180,000 / $300,000 = 60.0%

    Ready to run the numbers?

    Open Wholesale Deal Analyzer