What is the current investor discount for San Bernardino, CA , Riverside, CA , or surrounding cities in the Inland Empire i.e. San Bernardino County and Riverside County?
@J.J. Jaurequi I was going to answer your question with a more in-depth response and explain how it is nothing more than... but your extremely pathetic shot at me made me realize you are not worth any of my time. I thought people from San Bernardino where a bit harder than calling people "buffoon" and attempting to use "LGBTQF" as a putdown. The fact that you even posted that statement is proof that you're actually a bigot.
LOL. Give the guy a break. I'm pretty sure he's trying to gauge how much he should factor in when making offers. He's probably gonna wholesale and wants to know how cheap he needs to get something to make a profit.
@J.J. Jaurequi, you need to talk to your buyers to see where and how much they will pay.
@Aaron Mazzrillo My apologies, I will be more specific. Although, I sure hope you're just being facetious.
I am simply seeking advice from other wholesaling professionals here on BiggerPockets as to how much of a discount % rate I should factor in when calculating a Maximum Allowable Offer amount with a seller. I do not want to offer and contract it for more than what I can assign it to a cash buyer for.
Here's an example of how I calculate my offers for assignment.
(After Repair Value / Fair Market Value X Investor Discount) - Estimated Repairs - Wholesale Fee - Estimated Closing Costs = Maximum Allowable Offer
Investor Discount Rate varies and is determined by the current market factors of and in any specific area. For example due to the market in San Francisco, CA that particular city has a current Investor Discount Rate of 0% meaning there is no discount due to the market and what cash buyers are paying based on speculated future values in that particular market.
The Investor Discount Rate will determine the maximum amount an investor / buyer will pay for an investment property. i.e. with a property that has a Fair Market Value of $100,000 and local cash investors paying up to $70,000 for such a property, that means the current Investor Discount for that area is at 30%.
Now, Back to my original question. How much is the current investor discount for San Bernardino, Ca and or the surrounding area?
If you are unable or do not wish to answer the question, I understand.
@Kelly Singleton Thank You for taking the time to comment and your input.
I appreciate it. You were right on the money about your assumptions as to why I was asking the question.
Psst, hey Kelly... shh, don't tell the other guy that commented prior to you, He really comes off a bit buffoonish and I'm a firm believer in equal rights for the LGBTQF community and would never do anything to hurt their feelings on a public forum such as this. Once again, Keep that under your hat and between us please... Thanks ;-)
@J.J. Jaurequi I was going to answer your question with a more in-depth response and explain how it is nothing more than... but your extremely pathetic shot at me made me realize you are not worth any of my time. I thought people from San Bernardino where a bit harder than calling people "buffoon" and attempting to use "LGBTQF" as a putdown. The fact that you even posted that statement is proof that you're actually a bigot.
Or you can go by this axiom: you are paying more than anyone else is willing to pay. My reasoning: if someone was willing to pay more than you, they would own it. ;-). AG
@Aaron Mazzrillo I was wrong. I apologize. I hope you will please forgive my poor attempt at humor. It came off all wrong. Talk about a terrible first impression. I do regret it.
Aaron, although I don't know you, I will still wish you and yours the very best of Good Health, Happiness and Wealth, in that order, respectively.
Now to @Kelly Singleton It was wrong of me and I apologize for attaching your name to that comment, Please forgive that terribly bad attempt at humor. I was wrong. and although I do not personally know you either, I will also still wish you and yours the very best of Good Health, Happiness and Wealth, in that order, respectively.
Water under the bridge. What you are asking is nothing more than a self imposed road block. It is some useless information you deem necessary, but in reality it doesn't exist and even if you obtain some random number you determine is the margin you must work with, it won't help you get any more deals. Quite the contrary actually. It will cause you to lose many more because you will only be focused on those deals that meet or exceed this most irrelevant number. There is no set discount for investors. I have wholesaled many houses with 90-100% financing for thousands of dollars and one for more than $10K quite recently. Discount? Nope.
A deal is only a deal if it is presented to the right buyer. Even if you get a property under contract at 50% of ARV, when presented to a buyer with no money, it is still 100% too expensive. A house with 100% financing, but a good 30 year, fixed, low interest rate loan is a steal to a landlord with a few dozen or more houses who would like to obtain more properties, but will be denied by conventional lenders.
On average, I buy 60-75% of ARV. I have paid much more and much less. I recently purchased a $290K 2 bedroom house in a B+ neighborhood for $201K. It will rent for about $1,300 and I intend to keep it long term. A deal to a flipper? Yes. To the average landlord? Not really. However, my private lender funded $200K. I'm into it for about $7K after closing costs and prepaid interest. I still have what is shaping up to be a long drawn out and possibly costly eviction to go through to get possession. Why do such a deal? I have lots of crappier houses in worse neighborhoods that I will gladly harvest the equity in order to get this one down to a cash flowing position. I already listed a very poorly performing 4-plex and have notified one of my PMs that I intend to sell a specific house with a large equity spread as soon as it is vacant. Again, it also is a poor performer, but appreciation was kind so it is time to harvest and move the equity closer to home.
Business cards, domain name, company logo, company name, entity type, perfect contract, perfect mailing piece, investor discount - all pretend obstacles new investors tell themselves are necessary tasks to be accomplished before doing what actually makes money - making offers. Everything else is minutia.
I have one word for your response "Incredible", Knowledgeable", and "Outstanding". O.K. Three words.
I have to admit that after reading your detailed response, my entire thought process and perspective towards and regarding Wholesale Real Estate has been challenged and changed. I've read over your response a minimum of at least 5 times.
Thank You for taking the time to put together such an informative and well thought out answer with real life examples.
The four paragraphs you wrote hold so much insight, and not just about Real Estate but also the human psyche as well. It's truly an incredible read.
This morning while having my coffee, I listened to the BiggerPockets Podcast between You, Brandon, and Josh. I highly recommend everyone and anyone even remotely interested or active in Real Estate give it a careful listen. The knowledge and insight that you have and shared on this particular Podcast is profound to say the least.
Once again Aaron, Thank You, and Wishing The Very Best of Health, Happiness and Wealth For You and Yours as well as a Very Merry Christmas and Happy New Year.