What am I doing wrong?

6 Replies

I still need buyers !


So if I am not getting buyers to purchase after they respond to my ads what do I need to do?
I am running comps, getting zillow & eppraisal estimates, showing 70% below market, est repairs of 10k - 20k, taking 5K wholesale, and the rehab would still show 30% ROI for resell, or solid rental income.

What am I doing wrong? Why can't I sell the properties?

Hi @Debra N. Sounds like you have put the work in. Are you sure that your ARV is not too high? Is your presentation to your buyers laid out in a very clear manner?

On BP podcast #009 Anne Bellamy talked about how to present yourself to a hard money lender. I imagine the same techniques could be applied to a buyer.

Hope this helps.

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@Debra N.

If you aren't finding buyers, your deal probably isn't good enough for the market that you're in or your comps/repair estimates are incorrect.

I noticed you mentioned Zillow, but you need to get actual comps to determine value, as Zillow can be +/-30% of the actual home value. If you don't know how to run comps, you should find a local real estate agent and build up a relationship with them. If you use their services on occasion, I'm sure they will provide what you need. Just a word of caution though, make sure you vet your real estate agent carefully, some are good, some are bad.

You also need a much better way to estimate the repair value on a house. If you're looking at houses that are $300k, then having a $10k range isn't a big deal, but if your houses are less than $100k, that $10k is probably the make or break for the investor. Until you can accurately estimate the repairs, you're best off getting an actual bid from a contractor. There was also a book a read a while back that I call being pretty good, I think it was called the book on estimating rehab costs.

Also, taking a flat $5k wholesale fee isn't the way to go, you need to find out what investors in your area are willing to pay and your wholesale fee is what you can negotiate below that. I once had a wholesaler make $30k on a house and he told me after as a little 'haha' moment, but he was very surprised to find out that I didn't care, because I was buying the house with enough margin to make a much bigger profit.

-Christopher

Originally posted by @Christopher Brainard :

@Debra N.

If you aren't finding buyers, your deal probably isn't good enough for the market that you're in or your comps/repair estimates are incorrect.

I noticed you mentioned Zillow, but you need to get actual comps to determine value, as Zillow can be +/-30% of the actual home value. If you don't know how to run comps, you should find a local real estate agent and build up a relationship with them. If you use their services on occasion, I'm sure they will provide what you need. Just a word of caution though, make sure you vet your real estate agent carefully, some are good, some are bad.

You also need a much better way to estimate the repair value on a house. If you're looking at houses that are $300k, then having a $10k range isn't a big deal, but if your houses are less than $100k, that $10k is probably the make or break for the investor. Until you can accurately estimate the repairs, you're best off getting an actual bid from a contractor. There was also a book a read a while back that I call being pretty good, I think it was called the book on estimating rehab costs.

Also, taking a flat $5k wholesale fee isn't the way to go, you need to find out what investors in your area are willing to pay and your wholesale fee is what you can negotiate below that. I once had a wholesaler make $30k on a house and he told me after as a little 'haha' moment, but he was very surprised to find out that I didn't care, because I was buying the house with enough margin to make a much bigger profit.

-Christopher

 Very well said. At the end of the day it's all one big numbers game.

@Debra N. as a Realtor with over 15 years in business, I agree with @Christopher Brainard , you may look for an agent that is savy working with investors and truly knows the areas you re selling in to get actual fair market value. Zwillow estimates are garbage sometimes too low(rarely) and often more than not way way too high. That's where your Realtor that really knows the area comes in and usually they live in that area also. Even in one given MLS area prices can differ dramatically for instance here in New Orleans Area 70 which runs parallel along the Mississippi River from the French Quarter downriver less than 2 miles prices can vary greatly depending on location within it. Closer to FQ is higher than at farther end and crossing an Avenue or Railroad tracks can differ pricing 2 to 3 times. And also within those sections, closer to River and interior of Area 70 can do same thing to prices. The MLS Area of which I speak of is only roughly 5 block wide by 30 blocks long. And the adjacent Area 72 which runs parallel to Area 70 for it's length, the pricing for a similar  size, style house in same condition would  would be a half to a third. This is why I think Zwillow pricing is useless compared to a real live person who knows the areas. Using a half mile radius circle from subject home I could see pricing differ by as much as 4X!

Lastly, are you properties in a less desirable area? Would you live there?

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