Be wary of Networth Realty flip deals

[Account Closed]

I bought 2 homes from NetWorth Realty, one in Brandon & Plant City and rehab budgets for both went thousands and thousands more on a medium sized block home. The contractor that used to do THEIR estimates and the one they recommend to my wife and I didn’t complete the job and the homes could not pass inspection. Both homes came out to be about 18-20% over their "estimate" with the licensed general contractor.

Obviously they market to the novice investors with calculated ARV's and estimated rehabs built in. But because they require you to use 212 loans within the first 48 hours you typically have to move fast.

**Recently was enticed to a view a South Tampa pool property that had an estimated 55K rehab cost. After personally reviewing the property and noticing an issue with the foundation of the pool and pointing it out to them, (I am not even a contractor or an architect and noticed this) they came back two days later with an estimated rehab of 95K!!! Not even off by a couple grand but nearly double the cost! HA! This goes to their lack of professionalism and other entities involved with them (the contractors coming to draft the estimates). After this newly discovered problem and knowing no investor would waste their time on the property, Networth realty decided not to purchase the property from the owner and dump it back to him. 

This is not some fly by night wholesaler. They have built a national reputation. Here's the thing- Don’t trust their non-stop marketing emails. Your rehab budgets will almost certainly go over, sometimes by the thousands and sometimes by the TENS of thousands. Feel free to PM for additional details. Be very very careful when dealing with this company.

[Tchaka Owen]

Originally posted by @Frank Wong:

I think when you are dealing with any wholesaler you have to run your own numbers. You can't just trust what they give you. Everything I looked at from NetWorth didn't work for me. The ARV and rehab costs were all wrong.

That's a big problem!

Almost all wholesalers 'tune' the numbers a tad. ARV is usually a sliver lower and rehab costs are also a little lower (most decent wholesalers will not vary more than maybe 20%). We accept that and understand that due-diligence is needed. If you're saying the costs are "all wrong", that's not a tad off. And a $95k rehab advertised as $55k is not a tad off either. That's unacceptable.

Yes, due-diligence is a must; however I look at it in yet another manner: you wasted my time. 

Time is the most valuable thing in all of our lives and I'd rather spend mine working on worthwhile deals. I've run into similar companies and after running numbers on a few properties, I tend not to give more that a cursory glance when their emails arrive (then delete).