Wholesaling/Selling of Luxury Homes

Can anyone give me some insight on the thought of going into this type of real estate arena? I know alot of people are afraid to touch luxury homes because of the holding costs involved. Since there would be less competition I would like to get involved with this niche.

I have easily attained about 7 deals where the houses could be controlled for about 60-70 cents on the dollar, but I would like to have more options available when it comes to wholesaling these properties. I am currently able to find houses that are 60-70 cents on the dollar on the listing price on the mls. Is this a good price to start with or should I go for the tax assesed price which is always considerably lower?

I am curious if anyone on REIClub is currently doing the same type of investing?

Thank you


I forgot to add that I am not interested in holding onto these properties for more than one to two months. I am hoping with the price that I would be controlling them that they will sell in that time frame. I am looking to buy low sell a little higher.

I have found a group of investors that deal with luxury homes. Basically I am a birddog for them, I find them deals put them under contract allow them to email blast the property to their rolodex of buyers and we split the profits when someone buys.

I got seven deals now, and I am still waiting to find out which properties we will be putting under contract. I have recently found another method of selling the properties the investors dont want. With this method I would only get one percent of the gross, but it is better than nothing. I have started amassing a decent starter buyers lists that seems to get a little bigger every week or so.

Right now I am very interested in short selling luxury homes and need to find a private lender. I might have some at this time but I woud love to find and deal with one only that supports what I plan on doing with thier money.

I also am new, I really am interested in a private lender . Where would you suggest that I look for one? I am into homes on maui, if anyone can help me, thank you in advance club, good investing to all, aloha, Paea

Go into the audio section of REICLUB and look for Alan Cowgill. That should help you.

I know this might sound goofy answering my own question; I have noticed that by simply telling people about what I am doing it peaks thier curiosity and they tell people as well. Basically, to find private lenders just tell all your friends and family. My bud’s grandfather and other investors might be willing to fund some of my deals. He will get his money back plus interest and my partner and I will make a decent profit. Everyone wins!

I have flipped dozens of very expensive homes over the years. The profit margins are incredible. However, I must caution you to break open the amonia bottle, take a sniff, and wake up to the reality of our current economy! One bump in the road in this market can (and will) eat up many years of profits from other transactions.

Although I have made substantial mark ups on these homes, if one sits empty due to this type of economy, and although you might eventually get out of the deal, why put yourself at risk for such a high mortgage on one deal? If you do not have a viable ‘exit strategy’ then do not do this!

You can buy a small apartment complex, several duplexes or tri’s, or a small mobile home park for the same money/credit at risk and hedge your bets and minimize your risks. With one vacancy on an expensive home, you are at 100% vacancy rate. With one vacancy in a mobile home park or small multifamily, you are at 10% vacancy rate and can still pay your mortgage.

Speaking from experience, as I mentor investors all over the country, it is important not only to know what to do but what NOT to do.

Hope this helps.

R.E. Investor/Mentor

Thank you for your insight. What I plan to do now is sit down with my realtor tomorrow and see about luxury reo properties that I could get at a better cost ratio. If I could get a luxury home at a good price I would then give my agent the listing for 30 days, (thanks fdjake), to see if she could sell it at a disconted rate. After that 30 days I have a small list of buyers I could sell it too, or as a last resort I have contacts at a major auction company.

What do you think?