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Earnings can be greater than retail sale
By Gregg Stengel  | | Terry and Cyndy Bartelli wholetailed a house to decrease days on market and increase earnings. | | If you’re passing up buys because you don't want to close on the properties, retail them, and sell them, or you’re making too little money after rehabbing, or not enough money when you wholesale you may want to follow the example of many franchisees who "wholetail" properties to decrease time on the market and increase earnings. The term wholetail is defined in the HomeVestors glossary as: A hybrid or potential rehab that falls in between a retail and a wholesale. In a wholetail situation, the franchisee closes on the property, completes some repairs (i.e. exterior paint, new roof, or cleaning up inside), and sells the property "as is" to an investor or landlord or consumer as a "fixer upper" that is priced under the market. In San Antonio, Terry and Cyndy Bartelli of Bartelli Properties recently wholetailed a house that was nestled among many other cookie-cutter neighborhood houses. "We had renovated a house in the same area a few months earlier and had a hard time selling for a worthwhile profit," Cyndy explained. "This time, we decided to wholetail it and market it 'as-is.' We did service the air conditioner and had a foundation company certify that no foundation work was necessary. We had it cleaned and put on the market, but the house still needed lots of paint and caulk." The After Repair Value (ARV) of the property was $129,000, but the Bartellis listed the house in MLS for $109,000. "Within two days, we received eleven contracts with five contracts for $115,000 or more," said Cyndy. "We accepted a $119,000 offer with no real estate agent involved and sold the house 'as is' for 91.5 percent of the ARV." The Bartellis' anticipated profit: more than $25,000. "Obviously, this does not happen with every deal, but usually we can make almost as much on the bottom line by wholetailing instead of retailing on certain homes," Cyndy explained. "Because of the number of investors now in the market, realtors are indicating that consumers are scrambling to get properties for themselves." The Bartellis paid a flat fee to a realtor for the house listing on MLS, along with verifying with the buyer's lender in advance of signing the contract that they would not have a problem financing an "as is" contract. . . .Gregg Stengel is the marketing/publications manager for HomeVestors; he may be reached at 972-761-0046, ext. 189.
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