Four month wholesaling test with real money. Finished $6,900 down.
I've spent years underwriting, so I figured this would come easy. I treated it as a test with a budget and a stop date, which is the only decision I'd repeat.
Budget: $14,000 across mail, skip tracing, a dialer, and a part time caller at $9 an hour. Four months, one metro, houses between $180,000 and $260,000 finished.
Outcome: 2 contracts. One closed, fee $4,100. One died and took $5,000 of hard earnest money with me on it. Add the marketing spend against the fee and I'm out roughly $6,900 all in, not counting my own hours which I've stopped counting on purpose.
Where the dead one went wrong, precisely. I put ARV at $242,000 using three closed comps within half a mile, all within 90 days. Two of them had finished basements. Mine didn't and I applied a $9,000 adjustment because that's what the pattern suggested. My repair estimate was $38,000 from a contractor walkthrough. Contract at $172,000, which left what I thought was a $23,000 buyer margin at my assignment price of $181,000.
Every buyer I took it to came back between $164,000 and $169,000. Not one of them argued with my ARV. They all argued with the basement adjustment and with $38,000. Two said $52,000. So my spread was never there. Earnest money went hard on day 15 because the seller wouldn't sign otherwise and I wanted the deal.
The under $250,000 tier in that metro also has institutional money in it now, which showed up as two of my better leads getting a competing cash offer within a week of my mailer.
What I'd do differently: get the buyer's number on the repair scope before earnest money goes hard, not after. My underwriting was internally consistent and priced off the wrong repair figure, and a phone call on day 10 would have told me that for free.