i have a house under contract but it is an hour away from most of the buyers. all of my buyer connects say that they are not interested either because it doesnt have enough meat in it or its an hour away from where they live.
150k ARV and i can assign it for 80k. put 30 grand of work MAX.... how many other costs do you add into that?
anyways, even if you were just making 15k profit why wouldnt you do it? i would definitely drive an hour or two or even 4 hours to make 15k
Two different things going on here.
First, if they say there is not enough meat in it, then they doubt your ARV, your rehab estimate, or both.
Second, if it is too far away, it is too far away. That's a small project, probably to be done by a flipper/investor who does at least his own project management is not most of the work. How many times would you drive 2 hours for 15 grand? How many hours of road time would you be able to pay your guys before you are losing money?
It usually boils down to 2 reasons why properties don't sell.
Price or Terms
If there was enough money in the deal someone would drive an hour away from their farm. Each person will have their own threshold. For example, they might be able to make $15k spread all day long in their farm with less risk. So they may have a rule that says. "Any deals outside my farm of a 1hr radius, there needs to be at least 25K in net profit.
Have you considered finding new buyers? Look up recent cash purchases in that area, network with that REIA, those realtors, etc. I don't like to invest 15 minutes away from my office..
For a flip there's a lot of additional costs. Realtor fees at selling, taxes, insurance, utilities, cost of borrowed funds, etc. I wouldn't want to run a $30K rehab an hour or so from my house unless I had rehabbing down to a science. And it sounds likely that, as mentioned before, some buyers doubt the ARV, repair cost, or both.
and if you consider the cost of hard money - there really wouldn't be enough left
@Derek LeBlanc Have you ever done a flip?
Assume that your ROI is even a little off. There goes a little bit of your $15K. Then assume that you missed some small thing that anybody could miss in your repair costs. More drop in the profit. Then something happens to delay the project a bit, increasing holding costs. All of a sudden that lucrative profit is barely worth doing.
Investors can get better ROI elsewhere with less risk and less effort. You are not talking an hour or two of driving, you are talking an hour or two PER DAY of driving.
how do i find cash buyers. i tried listsource
I have buyers in my market that would gladly do a deal like that an hour away. But that's because deals are harder to find and pretty thin these days in my CA farms. Your buyers may have better deals in their own backyard.
Has anybody that's shown interest actually looked at the property yet to give you feedback on your repair estimate and/or ARV?
You find local buyers by looking at what has sold nearby, and who the buyers are. LLC and Corp buyers might be investor buyers, as might be any non-owner occupied buyers. You also need talk to agents in the area that work with investors. They're always looking for deals for their clients. Some are being paid by their client to bring them deals. Some will want you to pay them to bring you a buyer.
Where is the property located? If you want to send me the address I'll check what comps I can find and see if it looks like there is any investor action going on. Some of my data sources are limited for certain East Coast areas though. Let me know if I can help.
Derek, you should be all over that very generous offer from K. Marie Poe.
Sounds like you need a better buyers list. Find out who is actually buying and buying in that area.
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