Insight wholesale or fix-n-flip

15 Replies

Ok, I put a property under contract a little over a month ago. I knew the property price was more than my cash buyers would pay for a property, but the property was such a GREAT deal that I couldn’t pass up. So, the question is being the contract goes up on Aug. 15th and I haven’t had one solid offer. Should I start looking to raise money thru private lenders and do a fix-n-flip or should I back out the deal if I don’t get an offer by the 14th? Granite, I do live in a smaller town where cash buyers are far, few and in between..

Hi Brandon, 

If I were in your position, I would start looking for money to close the deal. The seller is looking for you to take the home off his/her hands, and after you signed the contract with them, I feel like you should do your best to move forward if you can. You've still got 2 weeks to get this together so it's certainly not impossible. If you take the property off of the sellers hands and make money, then it's a win/win for both parties. 

Perhaps I'm reading it incorrectly, but the confusing part about what you're saying is that it's "more than cash buyers would pay" yet you say that it is a great deal.  If it's a great deal, then the cash buyers should be chomping at the bit as great deals are one of the hardest parts of investing, so it's one or the other.  If no one else thinks they'll make money on it, how will you?  The problem with finding money to do it yourself is that your money source is also going to want to know that you won't be upside down on it so that they can get their investment back.

You might need to re-look at what price you need the property at for it to make sense as an investment, and try to renegotiate to that price.

@Kuba F. Thanks for the reply, and yes. I have a list of cash buyers that don’t pay more than 40-50 cash for properties And they dont purchase often. Like I stated. I live in a small town so there isn’t cash buyers that are willing to throw out 108,000 on a property cash. I’m sure in LA they have them by the dozens. But here in rural Mississippi, that’s not the case. Unlike most wholesale dealers, I run my comps plus get an appraisal done. So the value is true.

I thought that might be the other interpretation.  Well in that case if it's a great deal and it makes sense to do it yourself then put a package together for your hard money lenders.  You could always renegotiate your closing date if you need an extra week or two.

As others mentioned the seller is counting on you to close on the deal. Especially since it's a smaller town like you mentioned word could get around quick if you don't follow through and it could hurt you. 

Do the numbers still work if you use hard money to finance the deal?  Best of luck.

@Joseph M. You’re right, and I have a good reputation around my area. This is the first time I have ran into this type of situation but granite. I’m no season investor either. I plugged the numbers in and the profit margins are a little lower than I’d like but a lIttle profit over no profit and a bad reputation works for me any day.
@Susan Maneck thanks for the reply Susan, I live in mccomb and have been looking to get into the market in Jackson. Would love to have a meet and greet with you sometime next week to gain some insight on what works in Jackson and what don’t.