Hi guys,
After searching all over… I noticed the questions are:
a) How do I find Sellers—which I find very easy
b) How do I find Buyers/Investors—which I find challenging…
HERE IS MY STORY!
I finally completed my RE investing course with a great mentor. So off I go into this RE Investing. I opted to be involved as a middleman in the transactions (chose to only mess with new construction with very high equity) just so I can really play in both fields, finding investors/buyers as well as sellers…better than just dealing with one side…because I learn to specialize in both…I think!!! Then after a few deals I can start buying, renting and selling…
So far so good. considering the fact that I have chosen to go with luxury properties, I am able to get the properties from the sellers and get rid of them at 65 cents on the dollar which I see many of us say that selling at 70%LTV is the average. I am okay with the 65% just for the sake of closing my first deal…VERY EAGER!!!
BUYERS…mmmhhhh…now…this is where I am facing some challenges. Even though the properties are selling at 65 cents on the dollar, it seems to be impossible to get anyone to even look at them.
Is dealing with luxury properties harder to find buyers than dealing with properties under 500K or what are the factors that affect the ease of finding buyers.
I thought high equity deals are great considering the seller is letting them go at 5% less than the average 70% or rather is there a way to find investors/buyers that deal with luxury properties of over 1M?
luxury homes are going to be hard to sell in this market, but as is always said “if priced right, anything can sell!” Which means if you are having problems finding buyers for your luxury houses at 70% of ARV, try 60% of ARV. This of course means you’ll have to buy the houses cheaper then the 65% you currently are buying at.
I would go to your local REIA and find the buyers who deal with luxury homes and ask them their criteria. This should give you a good idea of where you have to be in terms of price.
Most people buying those types of homes already have nice homes. So you have to give them a good reason (price) to consider yours.
Many people buying those types of homes would have to sell their current home in order to buy another. And selling anything right now is going to be tough.
Scott: I am not buying at 65%LTV but SELLING at 65%LTV
Selling a new construction never been lived in homes at 65%? I mean are there any other ways that I can sweeten these deals. what I have come across is that investors are thrilled when they can get homes with high equity for the purposes of refinancing and pulling out the money.
Many investors shy away from luxury homes because of the holding costs, high rehab…etc. although you may find few. If you do, hold on to them and feed them as much as you can. An alternative is to auction the house, but that would require some money to advertise the auction.
Luxury homes is a niche, I like to work with the bread and butter homes myself.
What scott is trying to say is you have to sell at 60% LTV. It’s simple math. The market is not good for high end deals. I have been in this business for over 30 years. I have amassed significant wealth and I am enjoying the fruits of my labor.
Why isn’t the market good? - Now you can listen and learn or starting singing a tune.
(1) Banks are not lending
(2) Even at 60% LTV home prices are dropping
(3) The market is unstable
(4) Cost to hold too high, too risky
(5) **Now this is if you are really in the business - you have to watch what these political heads are doing.
Now if your mentor is any good, I am SURE he’s said these things to you. It’s not about finding buyers, it’s about picking your buyers. If you aren’t in the right circle, they WILL NOT mess with their money with some THEY DON’T know. Why? Millionaires are losing their homes, right?
Hope that helps. Take a piece of advice, tread lightly. Creep, crawl… don’t run.
