Wholesale Calculator Real Estate

Real Estate Wholesale Deal Analyzer

The estimated market value of the property after all necessary repairs and renovations are completed.

The total cost to bring the property to its "after repair" condition.

The maximum percentage of ARV an investor is willing to pay for the property (including rehab costs). Commonly 65-75%.

The profit you, as the wholesaler, aim to make on this deal.

Deal Analysis Results:

function calculateWholesaleDeal() { var arv = parseFloat(document.getElementById('arv').value); var repairCosts = parseFloat(document.getElementById('repairCosts').value); var investorPercentage = parseFloat(document.getElementById('investorPercentage').value); var wholesalerFee = parseFloat(document.getElementById('wholesalerFee').value); if (isNaN(arv) || isNaN(repairCosts) || isNaN(investorPercentage) || isNaN(wholesalerFee) || arv <= 0 || investorPercentage <= 0) { document.getElementById('maoResult').innerHTML = "Please enter valid positive numbers for all fields."; document.getElementById('investorPurchasePriceResult').innerHTML = ""; document.getElementById('investorTotalCostResult').innerHTML = ""; return; } // Convert investor percentage to a decimal var investorFactor = investorPercentage / 100; // 1. Calculate Investor's Maximum Spend (Purchase Price + Rehab) // This is the maximum an investor is willing to pay for the property including rehab costs. var investorMaxSpend = arv * investorFactor; // 2. Calculate Investor's Maximum Purchase Price (what they pay the wholesaler) // This is the maximum price the end investor can pay the wholesaler for the contract. var investorMaxPurchasePrice = investorMaxSpend – repairCosts; // 3. Calculate Maximum Allowable Offer (MAO) to the Seller // This is the highest price the wholesaler can offer the original seller. var mao = investorMaxPurchasePrice – wholesalerFee; document.getElementById('maoResult').innerHTML = "Maximum Allowable Offer (MAO) to Seller: $" + mao.toLocaleString('en-US', { minimumFractionDigits: 2, maximumFractionDigits: 2 }) + ""; document.getElementById('investorPurchasePriceResult').innerHTML = "Investor's Maximum Purchase Price (from Wholesaler): $" + investorMaxPurchasePrice.toLocaleString('en-US', { minimumFractionDigits: 2, maximumFractionDigits: 2 }); document.getElementById('investorTotalCostResult').innerHTML = "Investor's Total Cost (Purchase + Rehab): $" + investorMaxSpend.toLocaleString('en-US', { minimumFractionDigits: 2, maximumFractionDigits: 2 }); }

Understanding the Real Estate Wholesale Deal Analyzer

Wholesaling real estate is a strategy where an investor (the wholesaler) finds a distressed property, gets it under contract with the seller, and then assigns that contract to another investor (the cash buyer) for a fee. The wholesaler never actually takes ownership of the property, acting as a middleman. This calculator helps you quickly determine the viability of a potential wholesale deal by calculating the Maximum Allowable Offer (MAO) you can make to a seller.

Key Terms Explained:

• After Repair Value (ARV): This is the estimated market value of the property once all necessary repairs and renovations have been completed. It's a crucial figure for the end buyer, as it dictates their potential profit.
• Estimated Repair Costs: The total cost anticipated to bring the property from its current distressed state to its full "after repair" condition. Accurate repair estimates are vital for a successful deal.
• Investor's Desired Purchase Percentage (of ARV): Also known as the "70% Rule" (or 65%, 75% depending on market and investor preference), this is the maximum percentage of the ARV that a cash buyer is willing to spend on acquiring and renovating the property. For example, if an investor uses the 70% rule, they want their total investment (purchase price + rehab costs) to be no more than 70% of the ARV. The remaining percentage accounts for their profit, holding costs, and selling costs.
• Wholesaler's Assignment Fee: This is your profit as the wholesaler. It's the fee you charge the end buyer for assigning the purchase contract to them.

How the Calculation Works:

The calculator works backward from the After Repair Value (ARV) to determine the highest price you can offer the seller while ensuring the end investor still makes their desired profit and you secure your assignment fee. The steps are:

1. Investor's Maximum Spend: First, we calculate the maximum amount the end investor is willing to spend in total (purchase price + rehab costs). This is derived from the ARV multiplied by their desired purchase percentage (e.g., ARV * 70%).
2. Investor's Maximum Purchase Price: From the investor's maximum spend, we subtract the estimated repair costs. This gives us the highest price the end investor can pay you (the wholesaler) for the property contract.
3. Maximum Allowable Offer (MAO) to Seller: Finally, from the investor's maximum purchase price, we subtract your desired wholesaler's assignment fee. The remaining amount is the absolute highest offer you can make to the original seller to ensure a profitable deal for all parties involved.

Example Scenario:

Let's say you find a property with an estimated ARV of $300,000. The estimated repair costs are $50,000. Your target cash buyer typically uses the 70% rule, and you want to make a $10,000 assignment fee.

• Investor's Maximum Spend: $300,000 (ARV) * 0.70 (70%) = $210,000
• Investor's Maximum Purchase Price: $210,000 – $50,000 (Repair Costs) = $160,000
• Maximum Allowable Offer (MAO) to Seller: $160,000 – $10,000 (Wholesaler Fee) = $150,000

In this scenario, you would aim to get the property under contract for $150,000 or less. You would then assign that contract to your cash buyer for $160,000, making your $10,000 fee. The cash buyer would then pay $160,000 for the property and spend $50,000 on repairs, totaling $210,000, which is 70% of the ARV, meeting their investment criteria.

Using this calculator helps you quickly analyze potential deals and make informed offers, increasing your efficiency and success in real estate wholesaling.