Whole Seller Tactics
Hello BP, My family has a property that I was looking in to purchasing. It is a single family home that was left to my mother and her siblings with the directions to sale and split the profits but give interested family members first priority. I did some due diligence and made an offer that should’ve been reasonable considering the condition and location of the house. When I made the offer, my mother informed me that an out of state law firm acting as a whole seller had contacted her with a letter offering a lot more. I looked at the letter and this whole seller was offering what amounted to the highest possible retail value based on the Zillow estimate sight unseen, no questions asked. I went back to my numbers and, using the BP calculators and speaking to a realtor to gather comps, I still couldn’t make what they were offering make sense. The price they’re offering would negative cash flow by hundreds of dollars for years until the rent prices caught up or something drastic changed in the neighborhood causing a rapid appreciation of the area.
That brings me to my question. Do some wholesalers use the tactic of offering an high retail price to get prospects to bite and then dropping their offers down by thousands of dollars after inspection? Because I can’t pencil out how they would make money on this deal otherwise. What’s the angle?