selling rehabed homes fast

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Ryan Pyle
Multifamily Investor · Toledo, OH · Member since 2008 · 296 posts · 308 votes
17y

I sell my houses for $75k, which means a $575 PITI at today's rates. These houses would rent for $625/mo, but the rentals would not be nearly as nice. I advertise my FOR SALE houses in the FOR RENT section of the paper. Something like: "4br, beautiful remodel, new kitchen, new bath, new windows, new roof. $575/mo. My phone #". When people call I tell them that "I've had lots of interest in the house and am now looking to help someone own it. I can get you in for as little as $500 down (first time homebuyers' grant from the city) and payments around $575 depending on income and credit." 50% of the people say no thanks, 50% say okay. I then ask them to tell me about their income and credit. (The banks I work with need minimum 580 FICO and 40% back end ratio). That eliminates another 25%. The remaining 25% have a shot at qualifying so I show them the house. Remember, they were calling on a rental and are expecting to see a typical rental. They walk into my new rehab and fall in love. They are usually calling my mortgage guy before they leave the house. Now, here's where you need a patient mortgage guy because we've easily gone through 40 showings to get a buyer before. It's usually more like 10 - 15.

This works...my average fix-and-flip in 2008 was 110 days from purchase to sale. My most recent sale was last week. I've never used the MLS to sell and I ANSWER EVERY SINGLE PHONE CALL and SHOW THE HOUSE IMMEDIATELY. Realtors and most investors I know don't do that. If you hustle, you'll get a good product sold.

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  • Jason Trepins
    Real Estate Investor · Wyoming, MI · Member since 2008 · 195 posts · 10 votes
    17y

    price it right.
    aLOT of different marketing.
    and most importantly, make SURE that the rehab looks great when finished.

    Choosing wrong flooring, carpet, colors...putting money into the wrong places...not having curb appeal...yadda yadda

    They all kill your chances

    0Reply
  • Richard Warren
    Real Estate Investor · Las Vegas, NV · Member since 2008 · 1k+ posts · 447 votes
    17y

    Most people aren’t able to do this, but offer to seller finance.

    Case in point, I purchased an REO several years ago. I was into it for approximately $30k in all and it was worth $75-80k. I sold it very quickly for $85k with $20k down with the balance at 8% interest only with a three-year balloon. My risk was the $10k spread between what I had into it and the buyer’s down payment. To date I have earned more than that $15k in interest and the buyer expects to pay off the $65k note in a few months.

    :cool:

    0Reply
  • Charles Savidge
    OP
    NC · Member since 2008 · 8 posts · 0 votes
    17y

    do you guys use allot of adds, intensives for buying realtors, that sort of thing?

    0Reply
  • Phil *
    Real Estate Investor · CT · Member since 2008 · 119 posts · 6 votes
    17y

    From my experience your better off targeting the Buyers rather than the Agents. The Buyers have told their Agent to show my property every time. For marketing we do full staging, MLS, Realtor.com and a handful of online classifieds.

    0Reply
  • Ryan Pyle
    Multifamily Investor · Toledo, OH · Member since 2008 · 296 posts · 308 votes
    17y

    I sell my houses for $75k, which means a $575 PITI at today's rates. These houses would rent for $625/mo, but the rentals would not be nearly as nice. I advertise my FOR SALE houses in the FOR RENT section of the paper. Something like: "4br, beautiful remodel, new kitchen, new bath, new windows, new roof. $575/mo. My phone #". When people call I tell them that "I've had lots of interest in the house and am now looking to help someone own it. I can get you in for as little as $500 down (first time homebuyers' grant from the city) and payments around $575 depending on income and credit." 50% of the people say no thanks, 50% say okay. I then ask them to tell me about their income and credit. (The banks I work with need minimum 580 FICO and 40% back end ratio). That eliminates another 25%. The remaining 25% have a shot at qualifying so I show them the house. Remember, they were calling on a rental and are expecting to see a typical rental. They walk into my new rehab and fall in love. They are usually calling my mortgage guy before they leave the house. Now, here's where you need a patient mortgage guy because we've easily gone through 40 showings to get a buyer before. It's usually more like 10 - 15.

    This works...my average fix-and-flip in 2008 was 110 days from purchase to sale. My most recent sale was last week. I've never used the MLS to sell and I ANSWER EVERY SINGLE PHONE CALL and SHOW THE HOUSE IMMEDIATELY. Realtors and most investors I know don't do that. If you hustle, you'll get a good product sold.

    1Reply
  • Curt DavisBusiness Member
    Flipper/Rehabber · Memphis, TN · Member since 2008 · 5k+ posts · 2k+ votes
    17y

    Richard,

    Way to go, it looks like for found a sucker, I mean a buyer who would actually pay over full retail. Hope you sleep well at night.

    Curt Davis - KAIZEN Realty538 Reviews
    WebsiteView Page
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  • Richard Warren
    Real Estate Investor · Las Vegas, NV · Member since 2008 · 1k+ posts · 447 votes
    17y
    Originally posted by Curt Davis:
    Richard,

    Way to go, it looks like for found a sucker, I mean a buyer who would actually pay over full retail. Hope you sleep well at night.


    I sleep very well at night. When you take the risk of carrying the note you can often get more for the house. It was a good deal for the buyer as well. Had he paid $80k that would have been the fair market he would have had a loan at a much higher rate than I charged due to his poor credit. He also would have incurred points, fees and other costs that he didn’t pay with me. It certainly would have cost more than the $85k he paid me and, in fact, he probably wouldn’t have been able to buy the home at all. Now he has a nice home for his family that he can actually afford. If I had sold the home to someone without offering financing I could have had all of my money at the time of sale instead of having to wait for it and there is certainly a time value to money. So instead of assuming that I ripped somebody off try looking at the big picture. Homeowners rarely buy homes at a discount, they are the very definition of retail. This buyer tried to buy other houses at retail and couldn’t and he now owns a home instead of renting. It was absolutely a good deal for both sides.

    :cool:

    1Reply
  • James Hiddle
    Altus, OK · Member since 2008 · 2k+ posts · 690 votes
    17y

    Did the seller know he paid $5K over retail?

    0Reply
  • Richard Warren
    Real Estate Investor · Las Vegas, NV · Member since 2008 · 1k+ posts · 447 votes
    17y

    The seller knew the market because he had been actively looking in that particular area. Did he actually pay $5k over market? Hard to say for sure because of variations maybe he paid $10k over or only $1k over. The bottom line is that to him the house was worth what he paid. The area he is in has actually appreciated due to strong local factors and he could probably sell it for $95k or more today.

    :cool:

    0Reply
  • Diane Menke
    Contractor · Philadelphia, PA · Member since 2008 · 183 posts · 17 votes
    17y

    Ricahard,

    Your method and reasoning make sense to me.

    The buyer felt the deal was good, the price was good, so thats what they paid.

    Same thing in the diamond business. Some people buy wholesale because they know they are not rare. Some pay full retail because of the romance they see in the purchase.

    Diane

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  • Richard Warren
    Real Estate Investor · Las Vegas, NV · Member since 2008 · 1k+ posts · 447 votes
    17y

    Thanks Diane,

    I think it was just the previous poster’s inexperience showing. Somehow you’re a wise investor if you get someone to sell you a house for 50% of what it’s worth because they’re desperate but you are greedy if you sell a house for slightly more than it’s worth. A good investor follows the axiom of “buy low and sell highâ€, apparently there are some who feel it should be sell high…but not too high. Makes no sense to me, a buyer is going to pay what it’s worth to them and if they don’t like the price they move on.

    :cool:

    0Reply
  • Jon Holdman
    Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
    17y

    In general, offering seller financing in any form can get you a better price than conventional financing. That's no different than when we're buying. The right combination of terms and price make the deal, not just the price.

    0Reply
  • Will BarnardPro Member
    Moderator
    Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
    17y

    I don't see anything wrong or immorral with the way this deal was handled. In fact, the buyer was not mislead or told the property was worth more. The buyer was willing to pay a set price with the terms he could live with and Richard got an extra $5k in price for "waiting" for all his money.

    I do question the statement that the home may be worth $90k now as Vegas is not currently (but will be again) appreciating. However, either way, looks like both parties are happy with the transaction and that is ALL that is important in this case.

    Podcast Guest on Show #130
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  • Richard Warren
    Real Estate Investor · Las Vegas, NV · Member since 2008 · 1k+ posts · 447 votes
    17y
    Originally posted by nationwidepi:
    I do question the statement that the home may be worth $90k now as Vegas is not currently (but will be again) appreciating.


    One should never assume. The home is not located in Vegas.

    :cool:

    0Reply
  • Will BarnardPro Member
    Moderator
    Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
    17y

    Fairt enough Richard. I did assume it was in your hometown. Either way, I do not know of any area in the country appreciating at double digit per increments these days. $80k to $90k is well over 10%, which is where my question stemmed from.

    Podcast Guest on Show #130
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  • Richard Warren
    Real Estate Investor · Las Vegas, NV · Member since 2008 · 1k+ posts · 447 votes
    17y

    That increase is accurate, but if you read my initial post it occurred over several years, not one. We are talking about a small mining town in north eastern Nevada that is experiencing a housing shortage. This has resulted in a situation that is an aberration from the national market. All real estate is affected by local factors that can cause a deviation, up or down, from the nationwide trends.

    :cool:

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  • Mark Yuschak
    Residential Real Estate Broker · Grand Blanc, MI · Member since 2008 · 885 posts · 316 votes
    17y

    My results are very similar to what Richard has posted.

    I recently picked up a really trashed 3/1.5/1 with a basement for 28K on a landcontract. My payment is only $149. I put $4,000 in it (mostly garbage removal) and repainted it, new furnace and new carpet. I have it on the MLS (I'm a Realtor, too), the local paper and Craigslist for $74,900 on a land contract and I've gotten over 25 calls in four days. I'm expecting a PA any day now... If I wanted to cash out, I could probably only get about $65K for the property. But, since I'm willing to hold a LC I'm getting a very good response. You just have to give the people what they want: Seller Financing!

    0Reply
  • Robert Markum
    Real Estate Investor · San Antonio · Member since 2008 · 11 posts · 0 votes
    17y

    I have used a local company that will buy the house for my buyers that have credit problems and then finance it back to them with no credit check. He puts the property in a trust in which the buyer and him are a part of. This really helps get rid of some of my properties. I even sell them at a little below market right now to try to move them faster.

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