Who are the ones that advetise torn down houses without fixing basic stuff

Phoenix, Arizona
General Real Estate Investing
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Who are the ones that advetise torn down houses without fixing basic stuff

Jimmy Rojas
Member since 2020 · 147 posts · 39 votes

Im located in Phx,Az, currently looking at single family homes in the $250k range, at this price point im not expecting the homes to be move in ready but recently saw in zillow or redfin houses advertised for sale where they are literally a mess , owner/investor didnt fix a thing on the house, who does this, whole salers, are they expecting to make a quick flip as is with no fixing up at all of the house, im in the car business and that is a big risk.

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Chris SeveneyBusiness Member
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Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
5mo

In many instances, it was a lender. Most lenders are just that, a lender, and want the asset off their books as fast as possible, so they will sell it as is. 

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  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    5mo

    In many instances, it was a lender. Most lenders are just that, a lender, and want the asset off their books as fast as possible, so they will sell it as is. 

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  • Arman AhmedPro Member
    Real Estate Agent · Columbus Cleveland Dayton, OH · Member since 2024 · 2k+ posts · 939 votes
    5mo
    Quote from @Jimmy Rojas:

    Im located in Phx,Az, currently looking at single family homes in the $250k range, at this price point im not expecting the homes to be move in ready but recently saw in zillow or redfin houses advertised for sale where they are literally a mess , owner/investor didnt fix a thing on the house, who does this, whole salers, are they expecting to make a quick flip as is with no fixing up at all of the house, im in the car business and that is a big risk.


    What you’re seeing is usually wholesalers or investors listing properties “as-is” to sell to another investor who will take on the rehab, they’re not trying to appeal to retail buyers at all. It looks crazy from the outside, but the play is buying low enough that even after repairs, there’s still margin left. In hotter markets like Phoenix, though, a lot of those deals get picked over, and the risk gets pushed onto the buyer. That’s why some investors expand into Midwest markets where you can still find undervalued properties with enough spread to actually justify the risk, even out-of-state. Same concept as your car business, if the margin isn’t there upfront, you’re the one holding the bag.
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  • Jimmy Rojas
    OP
    Member since 2020 · 147 posts · 39 votes
    5mo

    If they buy at a good margin space, couldnt they make improvements on the house and sell for more, making a bigger profit, thats the mind set in vehicles.

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  • Bill B.
    Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes
    5mo

    Most wholesalers don’t have that kind of money.  Especially if they’re not in the same state as the property.  They’re leaving you the chance to fix it up and flip it and then buy another from them. 

    They can wholesale while having and risking zero or almost zero dollars. As soon as they take title, pay closing costs, interest starts, they pay utilities, taxes, insurance, and then start paying for the fix up.  They’ll have at least 20x more money at risk, maybe 100x. Better for them to just do more flips. That’s your opportunity to take those risks and try to make that money. 

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