Transaction Coordinators, Problem Solvers????
I was listening to Podcast 75 earlier today and the very first part of the interview got me to thinking. I often hear wholesalers and other REIs refer to themselves as transaction coordinators or problem solvers. The gentleman in Podcast 75 described his first deal. He negotiated a seller down to $3K for her mobile home. He described the property as beautiful with very minimal repairs. If I am I not mistaken he said he put a few hundred dollars into the property and sold it for ~$27K. It was not clear to me what specific problem that was solved for the seller but I would have to assume fast cash was not it because he paid her $3K over 10 months. He also mentioned she didn’t need the money to move so I assume she had other living arrangements. I started thinking, perhaps the seller’s biggest problem was that she simply was not educated in how to value, market and sell the piece of real estate. If the buyer was educated enough to know that he could put a few hundred dollars into the property and sell it for $27k, to me it sounds like the seller's problem could have been solved for a lot less than selling her property for $3k over 10 months when it was worth much more. I don’t know what the seller’s other stress was.
So did the buyer really help her, or did he primarily help himself due to her lack of knowledge. To me there seems to be a very fine line between problem solving for the seller and taking advantage. I am not claiming that the gentleman in the Podcast knowingly took advantage of the seller, or that all wholesalers or REIs take advantage of sellers who simply are not fully educated on the valuation, marketing, and selling real estate. I listen to a lot of Podcasts on REI (BP and others) and I consistently hear people talk about achieving huge discounts from sellers but most of the time they don't go in to detail about the seller's situation. Sometimes they talk about getting the property under contract and simply sticking bandit signs in the yard or posting on Craigslist and they sell the property for $15- $20K profit in a matter of days. In my opinion, the seller's biggest issue would appear to be not being familiar with marketing with bandit signs and Craigslist. I am curious, what do others here on BP consider taking advantage of a seller?