More to learn? Seeing things differently? Or both?

[Shannon Oakley]

I have questions for any investors and wholesalers willing to participate....What is your buying criteria? How much do you actually expect to spend on a home wether off market or on market? How much do you expect to spend on a fix and flip? What is your buy and hold criteria?

I feel as if investors are missing out on great opportunities in the market by wanting the cheapest deals without realizing some of those come with major rehab. The market is flipping upside down and evolving. What the market was is currently not what it is anymore. ARV is harder to calculate in certain areas because homes are being purchased at asking price or 10,000 or more just to beat out the competition. Also, statistics are showing in most areas recent home purchases, and those homes haven't been put back on the market. Property values are going up, so fixer uppers are no longer only 70k or less. With developers flopping into cities that have been ignored for years expectations are different. We have known Houston, Dallas, LA, Miami, The five boroughs of NY, Washington D.C, Chicago, Atlanta, St.Louis, Detroit, and a few other cities to be the only major cities. That no longer holds true!!! Cities that have been ignored for so long are now evolving at fast rates and development is happening everywhere!

I find this very frustrating dealing with investors who seem to not understand that the bigger risks they take the higher the reward will be and that right now.....depending on rehab the BUYERS are determining the NEW MARKET VALUE!!! The market seems to be in favor of sellers right now with investors having to bend, but it seems as if old ways, outdated info, and old thinking habits from investors are making deals difficult for wholesalers. It seems as if they also don’t see and I mean really see what’s happening in today’s market. What we once could afford, we will have to pay more for. I just really want to hear from investors because it makes wholesaling extremely difficult at times. Some of us do extreme due diligence on our properties as if WE ARE PURCHASING THEM FOR OURSELVES !!! So that when assigning these contracts, the investor is running into little to no surprises, although inevitably there will be some during rehab! This is a career and not a hustle for a lot of us. I’d love to hear thoughts about this.

[Alex Grosvenor]

@Shannon Oakley

I have to agree with @Joe Villeneuve on this one. Investors that have been doing this a long time don't bend to anyone. They have a criteria and they stick to it. Asking price is just a number. If you are asking for 50k and my numbers says that I can buy it for 100k then I'll go over that asking without a problem. I'm not going to tell you that. I'm not going to start my offer with over your asking price either unless I already knew somebody else offered over you asking. That's not bending it's having a criteria. Same goes for the other way if your asking is at 100k and my numbers say 50k I'm going to offer you 50k. I'm not going to stray away from criteria just because you or the seller thinks its' worth more. If you bend you cause yourself to lose money because you didn't stick to what you know to be true, which is the numbers.  

Every investor has a different formula they use to determine what they can pay. Every person is charged different for materials and different for labor. Yes, it's around the same price, but some people get discounts some buy it at cheaper stores and some do it themselves so they save money on labor. Some get cheaper hard money, some get cheaper private money and some use their own money. So when running numbers and using formulas its inevitable that some people are able to pay more than others. Like Joe said it all depends on where investors are at in that specific moment because they are changing with the market and with the pricing of labor/materials/homes. So to group all REI into one group saying that they all need to change is a huge assumption and very inaccurate.

If people aren't buying deals right now it's because it's not a good deal. If you sent me a good deal no matter what area it's in I can find someone to buy it, If I don't buy it myself first. If the opportunity is there to make 30k+ on a good deal trust me people are buying it. Now if you have a deal that need 300k in with PP+Rehab then expect a person to be happy with a 10k profit theres too much risk for not enough reward. 

Sellers control the market because theres not enough inventory which is why investors are offering over what they were last year and the year before that because there's less inventory than last year and the year before. So if there 11,000 people looking and only 3,000 houses it only make sense that those 3,000 house would sell for a little more than they would under normal circumstances (sellers market currently). The same works the other way, if there was 15,000 houses with 5,000 people looking then houses would sell for less then they would under normal circumstances (buyers market (2008)). The market will eventually flip, but we've been in a sellers market for a couple of years and it's not flipping right now. This has been the real estate cycle of buyers and seller markets for as long as real estate has been a thing. Investors have been changing and adapting since before we were born and will continue to do it long after we are gone. 

To me it sounds like one of two things are the problem. One you are working with new investors who still don't know how everything operates yet. They don't have a system in place to succeed. Therefore many things are going to go wrong from their emotions getting in the way to them not knowing what they are doing fully. Or two, the deals you are securing aren't deals and you need to learn what is and is not a good deal. Maybe that's with rehab numbers or your ARV or maybe it's your ability to negotiate the seller down to where you know it's a deal then YOU BEND and expect the investor to bend just like you did. Self evaluate. Maybe its not everybody else. Maybe it's you.

This is all an outside perspective because I don't fully know your situation and I'm not there to access. But this is what it sounds like to me. I'm just trying to solve the problem your having so you can be more successful. Not argue over a post. So if you want the advice take it. If not I'll be on my way. 

Lastly, don't get upset and argue over posts. It's a friendly forum where we all come to educate people and learn from one another. Joe wasn't rude by answering all of your questions. You posted it, he quoted it, then he answered it. Nothing wrong with that. He gave you the answers that you asked for. Don't get upset because it's not the answer that you wanted to hear.