Inflated ARV is the root cause of most failed wholesale deals. You get excited about the potential, stretch your comp selection to justify a higher number, and set your contract price accordingly. Then you market to buyers who pull their own comps, see a different number, and pass. Always use conservative comps — sold in the last 90 days, within half a mile, similar size and condition. Use AI tools to cross-check your estimate before you go under contract.
The flip side of ARV inflation is rehab deflation. Buyers are experienced and their rehab estimates will be higher than yours if you are not thorough. Budget $25–$35/sqft for cosmetic rehab and $50–$75/sqft for full gut. Add 15% contingency to your estimate and use that number when you calculate MAO.
Getting under contract is not the hard part. Getting a buyer to close is. Do not celebrate until you have a signed assignment agreement and non-refundable earnest money from your buyer. Until then, you have a contract obligation and no buyer — and every day it sits is money out of your pocket.
Falling out of deals repeatedly destroys your reputation. If you consistently tie up properties and fail to close, sellers talk. If you send your buyers bad deals that do not pencil, they stop taking your calls. Your reputation in a local market is your most valuable asset — every deal should close or be released promptly with a clear explanation.
Verbal fee split agreements become disputes at closing. Get every co-wholesale arrangement in writing — property address, fee amount, split percentage, payment terms. A simple one-page agreement prevents 100% of co-wholesale payment disputes.
Dan White is a licensed Virginia real estate agent at Pearson Smith Realty and founder of FreeDealCalc.com. He has been investing in Northern Virginia real estate for 20+ years.