How Finicky are Investors?

Question

Julian Allen · Answer

@Rachel H. Thanks for the suggestion. There does not seem to be many rehabs going on in this area because most of the people there are long time homeowners in this area.

@David Michael  Thanks for your input. I spoke with an investor who looked at the comps and stated "one of the properties took two months to sell"  which seemed to be a concern for him although he felt they were solid comps. So that gave me a clue for this individual.  Thanks again

David Michael · Answer

@Julian Allen

I am not sure why that deal didn’t work with a 52% ROI. In Bergen COunty we would be lucky if we would have a deal like this. Most of the deals are high risk high rewards.  As an investor/developer I am looking at ROI. There has to be another underlining cause for this particular investor to shy away from a deal like that

You can also connect with local investors you meet here on bigger pockets to help fund the deals for you

Rachel H. · Answer

@Julian Allen Probably best to connect with investors doing business in that specific area. You can find them by driving the streets. Visit job sites and call on any potential rehabbed units you see (or in progress!). Good luck!!

Tim Youse · Answer

Well that explains it - those houses are the exception over there so that would explain to me why some investors would shy away from a deal. Even with comps, it's a risk IMO, since there are so many properties of lesser value over there. Mid 200s would put home buyers in a more desirable neighborhood, so that narrows your buyers pool on the front side and the back side of the deal, and it seems like the numbers wouldn't work for investors that plan to buy and hold/rent it out.

Julian Allen · Answer

@Amy A. Possibly. I am trying to get a better understanding. I think @Bill F. and @Tim Youse both have some good input. Each investor has different goals and a different level of risk tolerance even with comps. My initial thought was like yours that flippers wouldn't pass up on it based on the numbers from the CMA.

Amy A. · Answer

I don't think many flippers would pass on a $60k profit.  I know I wouldn't!  Even out here in the boonies a deal like that would sell.  They must know something about the property that you don't.

Julian Allen · Answer

@Tim Youse Thanks a lot for the input and the explanation and confirming the houses are the exception which sounds like at least the comps may be somewhat accurate. I know they say not to cross a major intersection which was part of the rule I follow. I can see where the numbers would not work for a landlord. I was thinking more along the lines as a fix and flip to a first time homebuyer but it sounds like that market of buyers maybe slim.

Julian Allen · Answer

@Tim Youse it is 3 beds 2 full baths with one car garage and fenced in backyard

Julian Allen · Answer

@Tim Youse and @Ozzy Sirimsi It is a single family detached with a garage and yard. There was a house down the street sold for $165K after renovations and that was 980 sqft.  Another was 2400 sqft and sold for $232K on the same street as well.  That house is in the link you sent above @Tim Youse.  Not sure if there is a difference on which side of Washington Blvd the homes reside on. @Sam Shueh it depends on if you do high-end finishes which seem to be popular in Baltimore. Repair estimate is on the high side and there is a wholesale fee in there as well.

Ozzy Sirimsi · Answer

I am with Tim.

My friend could not even sell her house for 40K for 6 months, so be careful with ARV's over there.

How Finicky are Investors?

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