I have done a few simultaneous closings on wholesale properties but took some time off because of the market downturn (I live in Florida so it has been especially bad here). Is anyone here having success with these kinds of flips in this market and is there anything different one should do to be successful in this down market?
In my past deals (when things were good) I drove around, found ugly vacant houses, got the contract and then found a buyer fairly easy. I am wondering if there are many buyers out there who are willing to be my end buyer. I don’t want to buy and hold.
There are definitely buyers out there, but they are buying CHEAP!
I’ve got 3 wholesale deals set to close this month (all are REOs), and all are being sold at around 50 cents on the dollar.
It might be easier if you locate a few buyers first, find out what they are looking for, and then go get it for them. Otherwise, just be really careful with your numbers, because, at least where I’m at, the old 70% formula does not work anymore.
REOs are a great place to find deals right now- the banks are taking some huge discounts!
I’m in Tampa, btw.
Thanks Steph. Great advice. I didn’t even think to readjust my formula but it makes sense. Gee, I miss the 70% days…I remember when I could get away with 80% …I will start to call every Ugly house sign to line up the investors and see how it goes.
I am in Ft Lauderdale by the way. It’s hard here but I believe do-able. Plenty of ugly vacant houses in all kinds of price ranges.
Interestingly enough as are market progresses downward 70% still works, you just need to make sure that it’s 70% of current market value. Current market value is in many cases 80% of previous market value. Confused yet?
Steph is right, be sure to line up your buyers first.
Eric, Not confusing at all. Makes perfect sense. I really am itching to get back into flipping. I will post when I have gotten some positive news to report.