I currently have a house under contract [...] and I need to find a buyer for it. I've put the ad on craigslist, contacted my buyers list, but I still don't have a response. I know it's a good deal!
Have you posted to the marketplace @Viktor R. ? What are the rehab costs? If you consider the 70% rule which many investors use the purchase price would be $230K × 70% less rehab cost. Thats $161K less rehab costs. That leaves $26K for rehab.
I did post to the Marketplace. It seems like a black hole though. It's not very user friendly at all. They need to do a lot work to it to make it functional. I'm not a fan but it's there. I did not mention rehab costs because from my previous experience they vary from person to person so drastically. I now leave it up to the buyer to determine how much they want to spend instead of me tellling them how much money they need to spend. On a scale from 1 to 10 with 1 as perfect and 10 as needing to bring down to the studs, this house is a 7-8. It needs a lot of work.
If you don't have any people interested who are investors, there is probably something they see from experience that you don't see. So even if you have a house for a really low price it may cost more than you expect to get it to where it needs to be to re-sell or rent. I heard on a podcast the other day, "you can go broke on good deals." What area is it in? How much is it, how many bed rooms/bath rooms?
One cool thing about being on the forums here you can ask people who have experience about your numbers. I see people running numbers on here all the time and getting a ton of advice from people who have been there already! Good luck!
If your buyers aren't interested consider that maybe it isn't really a deal, or just marginal. A real deal will have people jumping all over it. I get a lot of "great deal, act fast!" emails sent my way. Ones that actually make sense are few and far between.
Finding buyers: Go to the Snohomish and/or King county trustee sale on Friday and hand out your card. You'll find more real cash buyers than you need there. Bring a flyer with your property on it.
I looked at your marketplace post. Some thoughts:
- No address. Having to contact you for the address to lookup the property is just one more step. Plus I have to wait for you to reply. It slows me down, if I'm feeling lazy I may not bother. Put the address up.
- You estimate profit without estimating rehab. That doesn't work. At least put a rehab range in so we know how what kind of project it is. Or if you're not comfortable doing that (which is fine), don't estimate the profit.
- Describe condition of property - structure, roof, window, electrical, plumbing, HVAC, finishes. What kind of rehab does it need? Paint and carpet, full gut, cosmetics?
- No pictures. Your picture link requires a login. Find somewhere else to host pictures.
- 139k acquisition for 230k resale. 90k spread. From your post here sounds like it needs a fair bit of work. Doesn't seem like a very attractive deal.
This isn't the deal you think it is. The numbers are not great, and your difficulty finding buyers is due to the fact that your deal isn't very good.
Wow, you guys really like to give it to me straight. Thanks for taking the time to give me your input. It's greatly appreciated. I really appreciate constructive criticism that will help me grow. I can appreciate your guys’ input on my post. I’ve gotten some feedback from cash buyers that they really don’t want a rehab cost because most wholesalers don’t really know how much the repairs are. I’ve taken that feedback and applied it to my deals. That’s why I didn’t include it in the post. I can see how providing a rehab cost could help. I think I just may include a range instead. I also like to use a 0 to 10 scale with 0 being ready to move in and perfect and 10 a complete gut job. This gives a quick and dirty the condition of the house. It will be up to the buyer to determine how much they want to spend to make the repairs.
I had a house under contract a couple of months ago and I had 3 separate professional contractors come out and give me bids. Each one of them gave me a different number for the repair cost ranging from $20K to $32. That’s a huge difference! After thinking about it more this makes sense to me. It all depends what kind of rehab you want to do, what kind of finish you want, what things you may want to restore or just replace, etc. The rehab cost varies so much that for me to give that out would be like telling someone that I like vanilla ice cream and they don’t really care for vanilla. They like rocky road. But I can see where giving out the options of ice cream would make sense.
Finally, I am happy to report that I was able to find a buyer for the house. We are in the process of opening title and escrow and I’m slated to make a profit of $15K! Each buyer has different goals with a property and styles of rehabbing. Thank you all for the wonderful feedback that you’ve provided. It’s very valuable and I’ll use it to improve on my next deal which I’m hoping will happen in July. (I have a couple of houses that are in the pipeline) Cheers!
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