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I've been a residential realtor just over 2 years doing buying and some selling working with investors and owner occupants. Recenty I have gained access to an investor with a decent cash pile itching to make it work for him. My plan is to scour fsbos, for rent ads, the obituary, vacant listings with very high DOM, tax sales, make contact with probate and divorce lawyers and any other way i can think of to find deals. I've flipped a house before and while profitable for us it was a total pain in the rear end dealing with contractors. I've been thinking a lot about wholesaling and my general strategy would be to get a home under contract then market it aggressively to investors and eventually build up a contact list of investors looking to purchase our contracts. Purchase for very cheap, sell contract under market value and profit. I know that usually all cash offers require a much higher earnest money so we probably can't get away with $1k em and then bailing if we can't get a buyer. Trying to figure out good exit strategies for houses that don't get sold before closing. I'd like to make sure i'm only getting incredible deals so that if something looks like it isn't going to move we can just bump up the price very slightly to cover attorney fees and get it sold. Looking for anyone with experience in this field of real estate investing to tell me if/what about my general strategy is flawed. Thanks!
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Nov 11, 2015 16:14
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MAN OF MANY MOUTHS posted:I've been a residential realtor just over 2 years doing buying and some selling working with investors and owner occupants. Recenty I have gained access to an investor with a decent cash pile itching to make it work for him. My plan is to scour fsbos, for rent ads, the obituary, vacant listings with very high DOM, tax sales, make contact with probate and divorce lawyers and any other way i can think of to find deals. Depends on the state you're in and the laws there that govern dual agency and such. You don't really have to be a realtor to wholesale, but it helps. I have limited experience in that particular field, but I can say that investors almost always offer super low and and most people who live in their homes and have lots of equity simply won't sell to an investor, and most realtors worth their salt know an investor's offer when they see one, and can differentiate between an investor and someone feeling out a seller to see what they will actually take. I need more detail on your bit about "selling contracts." Are you talking about buying a house, fixing it up and selling it yourself as a realtor to investors you've already picked out, I'm not even sure about the legality of that and you'd be short-changing yourself unless you know investors who will not lowball the poo poo out of you. You should talk to a real estate lawyer who is familiar with the real estate laws in your state. Are you talking about getting a home under contract and telling your investors you're about to buy this house and to start making offers? That can and probably will backfire if you haven't closed on a house yet because you don't really have a guarantee that it will close, so you shouldn't try to sell something that isn't yours yet. So I'm really not sure what it is exactly that you're trying to do, but I see many pitfalls and potential disasters coming out of it. Bumping up the price of a house you have listed, unless you've done some work to it already, seems flawed. If your listing is on the market for, say, 40 days (in my market area, that's a super-high DOM number) and you haven't gotten any bites, I'd look at lowering the price, not increasing it. The price is usually the first unspoken objection buyers have, and since investors typically lowball anyway, I don't see increasing the price as any different than making sure you increase the DOM because that's what it amounts to. Even bumping it up slightly would look weird to me. What also looks weird to me is seeing a house that's been listed for a long time and they haven't lowered the price. That's the first thing any realtor will tell their client--we need to lower the price, dude, because you've had like 2 showings in a month. In your state, I'd guess that, like in mine, you have to disclose you're a realtor and will be representing yourself in the sale when you buy a house, so I don't see what the problem is with just buying a house as a private party, hiring contractors to fix it up to a moderate level that fits what buyers in your area are looking for (i.e. don't do unnecessary improvements that people won't actually offer more money for because you've done them), and selling it at a higher price. Your plan as it stands sounds like you're a realtor trying to be an investor, so I'm not even sure why you want to work with any investors if you're trying to invest yourself, it's needlessly redundant. IOW, I think you're making it too complicated and rackety. Just buy houses and flip them, profit is profit. If you're not making what you want to make in flipping (it takes patience and experience, you don't become a millionaire overnight), then go back to working with owner-occupants and listing houses. If you want to list a certain type of house to specifically market to investors, then yeah it helps to have investors in your rolodex whom you trust and who trust you so they can buy the house and flip it themselves. Let them deal with the contractors and use your real estate license to help people buy and sell real estate. Otherwise, you can flip houses without a license. It's not a bad idea to work with investors, so your plan isn't totally flawed, but the the rest of it under your first paragraph seems flawed, overly complicated and possibly not totally ethical if you're trying to do what I think you're trying to do.
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Dec 12, 2015 20:08
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MAN OF MANY MOUTHS posted:I've flipped a house before and while profitable for us it was a total pain in the rear end dealing with contractors. You only did it once, now it sounds like you've got some working capital to do this more regularly. Work on partnering with a good contractor that isn't a total pain in the rear end.
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Jan 9, 2016 15:34
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