Contractor · Pensacola, FL · Member since 2017 · 322 posts · 157 votes
So I'm doing alot of reading on rei. Books articles and what not. I see the strategy of driving for dollars and direct mails and the like. So for a deal to be good the owner must have equity right? Unless you short sell and I'm reading that is difficult and not exactly a good deal. So the question is why would someone with equity sell to me below what the property is worth?
I get that they are in disrepair. But say it's a 100k ARV and they have 50k in equity. Why would someone sell to me for say 55k? Why not just market the place with a realtor for 70 or 80k and call it a day?
I understand some properties would be unable to be sold via a conventional lender due to the state of disrepair and I get that some sellers just want to get what they can and dump the place. But is that common?
Where are you getting most of your deals? Distressed sellers or REO's or auction? Just soaking it all in, so thanks
It's not always that a property is in disrepair. We have been most successful picking up probate properties or properties sold as a result of a death in the family. 9 times out of 10, you'll find that the kids don't want to deal with the stress/headaches that they saw their parent go through and choose to sell it instead.
I had a friend who had a client who was going through a divorce and sold two income properties to buy a nice home.
Maybe someone found an up-leg property that is just that good that they need to get out of their current property.
You might also find that some people decide that they are far too busy and you might give them a number that is leaps and bounds higher than they could have ever imagined even if it is still a smoking deal for you. People who have owned their homes a long time are rarely aware of the appreciation.
I would be less concerned about why someone is selling and instead work on volume. If you want to be a wholesaler, think of yourself as a real estate agent. You're more or less a matchmaker and you're taking a commission in the process. Now, I'm not so sure about wholesaling. However, as a real estate agent, they recommend starting with about 500 homes. Typically it's a manageable number per expenses and provides ample opportunity to become a recognizable name. Just a thought.
Most people wont . But there are exceptions . Usually its a house that has equity but needs work and wont pass inspections for financing . So cash deal are attractive to these people