Too distressed properties?

Question

Hi there everyone, im currently actively looking for properties to wholesale, but is there such a thing as TOO distressed to wholesale? or would it just depend on the market your in?

Bryan Montross · Answer

I believe it really is all about the numbers. If you run the renovation numbers and buy it for the right price, there are investors out there that will buy it. As mentioned above, though, your buyer pool is limited. You may want to stay away from those properties until you have a big enough buyer pool that you can find a buyer quickly.

One caution I have is people will state, "the value is in the land." This may be true, but they try to sell it for more than just what the land is worth. If the property is truly a tear-down, it is a negative value structure and you should be paying less than the value of the land to buy it because the structure is adding negative value. It really is hard for some sellers to understand that, but most investors know it. Good luck getting your wholesaling business up and running.

David Ramirez · Answer

Not really. Usually, full gut, fire-damaged, and heavily flooded properties among others of heavy rehab will need bigger spreads and a certain type of investor, which results in a smaller pool of buyers. I've found that properties needing around $40k - $60k in repairs, which is usually cosmetic and one of the mechanicals or roof, will have high demand due to a larger pool of buyers.

Caleb Brown · Answer

You can wholesale "any" property. It will be based on numbers. There are plenty of dumpy properties in rough areas where buyers won't buy because it doesn't make any sense. But if you had a burn damaged house in the suburbs it'd sell. If you are starting to wholesale I would first focus on the prime areas, of course these are competitive but the properties will move. Once you start getting traction run realistic numbers for when you wholesale