We Reviewed This Wholesale Deal — Here’s Why It Didn’t Work
Recently, a wholesaler submitted a deal for review.
On paper, it looked solid.
ARV: $265,000
Rehab: $45,000
Contract: $195,000
He wanted to assign at $215,000.
At first glance?
Seems reasonable.
But once we stress-tested it, the cracks showed.
Let’s break down what happened.
Step 1: ARV Compression
The ARV was based on:
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One strong comp at $268K
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Two 60-day-old sales
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No active inventory review
But current actives showed:
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Two listings at $259K
-
Both sitting 55+ days
-
One with a price reduction
We compressed ARV 5%.
Now ARV became: ~$251,750
That alone cut margin significantly.
If you haven’t read this yet, this is why comps alone mislead wholesalers:
ARV vs Reality: Why Comps Alone Don’t Make a Deal Work
Step 2: Rehab Reality
The wholesaler estimated $45K.
We added 15% buffer.
New rehab: ~$52K
Now buyer total in:
$215K + $52K = $267K
Already near compressed ARV.
Before selling costs.
Before financing.
Before timeline risk.
This is exactly what the stress test is designed to expose:
The Wholesale Deal Stress Test: A Checklist Before You Send It
Step 3: Timeline Risk
Average DOM in that zip code had moved from:
21 days → 47 days over 90 days.
That matters.
We added:
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2 extra months carrying
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Financing cost cushion
Margin was gone.
Not thin.
Gone.
Step 4: Buyer Psychology
When buyers saw it, they hesitated.
Why?
Because instinctively they felt:
“Too tight.”
This connects to:
The Difference Between a Real Buyer and a Spreadsheet Buyer
Real buyers move on numbers that feel safe.
This didn’t.
What Would Have Made It Work?
Two options:
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Contract closer to $185K
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Assignment closer to $200K
Either one restored cushion.
But protecting the $20K assignment killed the deal.
This ties back to:
How Much Assignment Fee Is Too Much?
The Takeaway
The deal wasn’t terrible.
It was just priced for yesterday.
And markets move quietly.
Strong wholesalers adjust early.
Weak wholesalers argue with buyers.
Want Your Deal Reviewed?
If you’re sitting on a contract and unsure whether it survives compression, submit it here:
Wholesale Deal Review – RogersIP
We’ll break it down honestly.
Not emotionally.
