What would you do?

Rehabbing, Fix and Flip, Rental Properties
1

I’m new, not an REI yet as I haven’t bought my first, but hoping to buy/rehab/sell in the Greenville SC area. My plans have been delayed by a serious illness in my family back in the UK but I still receive emails from the local REI club in the Greenville area.

I received an email today about a house someone in the local REIA has for sale - 2 Bd / 1 Ba, 920 SF, ARV - $ 65,000, Repairs – Less than $ 1000, Taxes - $ 547.38 (sellers description) he wants $35,000, $500 earnest money.

I thought I recognised the address so did a quick check and I was right, this was a HUD house, an offer of $27000 was accepted by HUD on the 18th July so no way has it closed yet. HUD have an inspection report showing deteriorated LBP that this guy has to know about (that blows his "repairs - less than $1000 right out of the water). The ARV is based on a Zillow estimate that in turn is based on estimates of property values in the area not on actual sales, I did a quick comparison based on sales in the last 6 months within a half mile and it came back with a value of $38,000.

Two questions came out of this - the first, do I immediately email the group and ‘out’ this guy or do I just be thankful that I haven’t wasted my time over the last month or so and actually used it to find out as much as possible about the housing market in my target area?

The second, how could I (or anyone else) feel that joining their local REI club is in any way a good thing if people in that club are willing to try and rip their fellow members off like this?

Your opinions would be welcome

2

just walk away. nothing good ever came from “outing” someone. just file it away for next time one of his “deals” comes up. His reputation will catch up to him soon enough without help.

just be thankful that you did your homework and didn’t “jump”. a good lesson for everyone.

3

Mark is ‘spot on’…you gotta know the market, you gotta know what stuff costs, you gotta “do your homework” (due dilligence!) or you’re gonna get jammed.

If dnadm2004 didn’t do his homework the wholesaler was waiting to play a quick game of “Who’s your daddy?” with him. Rest assured that some unsuspecting ‘investor’ (probably a newbie) will buy this for the wholesaler’s price and get jammed.

You’re only as good as your reputation in this business…sleazeballs don’t usually last long. The word gets out.

Keith

4

do I immediately email the group and ‘out’ this guy

What exactly are you going to ‘out’ about this guy? I mean, he can’t possibly sell the house until he gets the deed, anyway. Perhaps his intentions are to do a double-close with the potential buyer? Maybe if you call him, he’ll explain better. I guess I don’t see any real harm unless he isn’t upfront with you when you call to ask more information.