I have finally found a buyer who is interested in buying homes in my area. That is the good news. The bad news is the buyer is looking for rehab properties under $10K. How am I suppose to make any profit from that? I have to find homes so ugly and distress that they would sell for $1,000 and under. I don’t see how I can get anything out of this if any at all. The cheapest house I seen cost $10k. I was hoping to find a house I could wholesale for a lot more.
Just say, “Thank you. When I find something with a zero profit margin, I’ll call you first. No, really!”
tbodley,
Why are you doing exactly the opposite of what you’ve heard a couple of professionals tell you already?
If you’re just insistent on doing this business the worst and hardest way possible, then the questions you ask are going to get you the worst answers with the hardest possible solutions.
STOP looking for buyers first like a puke amateur. You already know better, since you’ve posted on this before…! :banghead
Find the deal first!!! :shocked
When you actually have a deal like what Gold River would suggest… (70% (or less) of ARV, minus repairs) you’ll find the money, or the buyer for the ‘actual’ deal. Or…you’ll know your evaluation is way off, or otherwise don’t really have a deal.
Of course that brings me to the point of knowing your market well enough that you instantly know if you’re looking at a deal, or not, and can confidently tie up that deal for long enough to flip it (or whatever your exit strategy is).
Otherwise, you’re gonna be settling for the $10k or less, gutter feeder, that really has no money and despite what may not seem obvious, will not actually ever buy from you anyway. :flush
P.S. Evidently you don’t feel confident about tying up a property and then looking for a buyer. I’m suspicious that the reason is that you simply have not learned your market yet. Until you do, anything you find will seem like a gamble, and a major risk of not being able to flip/sell/resell.
Otherwise, just get a partner with money, and then present him with what you tie up…and if he likes it, you close on it. If he doesn’t like it, move on, or find another partner who’s not so picky… :evil
Javipa. I have to tell you this. Finding deals first is the total opposite of what pretty much every other professional investors are telling me. You say deals come first. All the others disagree with what you say telling me to find buyers first. Well if that doesn’t work out like you say it won’t, I have another buyer that I can have property to. I got in touch with another investor who has properties but no buyers. We talked over where this investor said it was ok for me to profit off of his properties if I find a buyer. I found a buyer. Now I am waiting to hear back from that buyer to see if a deal is going to get closed.
I understand your dilemma. All I can ask is, “How’s that workin’ for ya?”
Evidently, the one’s holding the bag of ‘can’t find a buyer deals’ don’t actually have good enough deals, in that market, that anyone wants to buy…which is exactly why I suggested that you…
- know your farm (So you can recognize what a good deal is)…
- find that good deal (negotiate a good good deal) in that farm…
- tie up that good deal (for as long as possible)…
- find the buyer for that good deal (or the money)…
- maintain a list of those who have called about your previous good deal(s).
I’ve already outlined how to see if you have a market for a good deal, so I won’t repeat it.
Frankly, if you’re convinced that your way is better, you’ll only recognize solutions that meet your version of reality, and nothing more I can offer is going to help you. There is more than one way to skin a cat, yes, but there’s an easier way…and a harder way. I like the way that results in fewer bites and scratches. :banghead
I’ll find out sometime soon how that is working out. The buyer was suppose to go look at the property today and will let me know if there is a deal or not. I already added my cut of the profit for finding a buyer. All the buyer has to do is go for it.
Hi,
First this is not personal Tbodley, we are sincere about trying to help out other investors, and Javipa and I look to the same results although our methods are different.
I always have an investor list, I add to it, change it, put it in alphabetiical order, sort it and shuffle it, let it evolve and change but in the end if I have something that fit’s what a fellow investor is seeking it’s always available!
But I work wholesaling primarily from a different angle as statistically investors are only involved in 30% roughly of US deals, so who’s involved in the other 70% realtors, lot’s and lot’s of realtors!
I advertise for Owner Occupied Buyers to provide homes for: IE
3 Bedroom / 2 Bath beautiful home on tree covered lot with 2 car garage, formal living and dining rooms, family room with fireplace attached to open concept updated kitchen with granite counters and stainless steel appliances, hardwood, tile and carpeted floors, professionally landscaped and full automatic irrigation system - Call Gold River at xxx - xxx - xxxx
I take these calls from owner occupied buyers, there seeking a nice home, but I am always running a 2 bedroom ad, a 4 bedroom ad, a 5 bedroom ad, a 1 bath, 1.5 bath, a 2.5 bath a 3 bath, a 3.5 bath and a 4 bath ad at the same time, I use my imagionation and the market research I have collected to describe a great home as bait for new buyers!
When someone calls and ask’s about the 3 bedroom / 2 bath home I always get there name and phone number first as I have to have contact info, then I tell them it just went to contract yesterday, but I have some others in the area I will have available shortly, then I ask a series of questions, everything I could possible find out about what there looking for in a home from square footage to beds and baths, to garage size, lot size, pool or jaccuzi, spa tub, master bath, walk in closets, treed or sunny, kitchen cabinet style, color, counter tops, appliances, sinks, tubs, finishes, tile or hardwood, carpet or vynal everthing someone could search for, then I tell them I can generally put you in a home with 10% or more in walk in equity!
I always make sure the buyer has a mortgage pre-approval and if not I refer them to my team mortgage broker to get them pre-approved, then I tell them “IT WILL TAKE A WEEK OR TWO TO FIND JUST THE RIGHT HOME FOR YOU” in the right area? Right school district? Right community? All may be possible but I make sure they provide a few options for each of these answers, then I scour the country side, my connections, bird dogs and my resources like MLS, auctions, etc.
When you can provide a home with at least 10% of walk in equity buyers will wait weeks and months for that right deal, it’s better than paying full price through a realtor, and I always make sure I understand how much cash they have, can they afford to do an assignment and still have there down payment and money to close or do I need to do transactional funding? I find it a lot easier for new investors to work the owner occupied market rather than to try to cater to investors as investors always have lots of sources and options and it is never a guaranteed sale to an investor where owner occupied buyers have resolve to buy a home, want a good deal and can provide a good picture of what there looking for!
Most of the time these buyers get 15 to 25% walk in equity as I still am trying to buy pristine home at 30 to 35% below FMV.
I usually take 6% profit on assignments and roughly 10 to 15% on transactional funding transactions as there is a bunch more work and we have to pay closing cost’s twice and cost’s of transactional funding!
My investor buyers list is always there, built in advance, built today or built tomorrow!
GR
Well that’s not bad. Is the property with 3 beds and 2 baths an example or something you advertised for real? Pretty soon I’ll be looking for a new niche with tax sale properties as soon as I get enough money to invest.
Hi,
These are all created for advertising, they rarely actually exist in actual inventory however for marketing purposes it describes a beautiful home that will get the phone ringing, from there it's all about "The Art of The Deal" as Donald keep's telling me!
Now you as an investor know how to pump out contracts, when to make low offers on properties still on market 45, 60 or 90 days without offers, we know how to canvas our market, we know the little tree at the corner of 5th and Elm, and we know there are 37 white pickets in the fence lining Market St. at 16th Ave.
We are the one’s who know our neighborhoods, or town or city, we can find homes to purchase wholesale when realtors try to sell retail!
GR
I know where you can get a deal for under 10k. I cannot guarantee that it will be a good deal. It will likely need a tremendous amount of work, or it could possibly be a tear down. There are online auction sites and historical homes. However, with historical homes, they likely need to be fixed up. You can get them dirt cheap sometimes but it may require that you cut the property and transport it to another lot. This again is more money and if it is not done carefully, the home can be destroyed. They call these homes dollar homes. Hud has some and some historical home selling sites have a few.
which type of homes u r offering, i mean its characteristics like how many rooms etc and in which locality?
I am offering homes with 3 or more bedrooms with 2 bathrooms with a minimum of 1,000 sq. ft.