Developer · . · Member since 2019 · 41 posts · 17 votes
Hello everyone! (I'm a new to wholesaling) I was driving for dollars yesterday & this neighborhood has A LOT of abandoned houses. So I’m going to try to see if I can wholesale them if possible. HOWEVER... it is in a “low income” area. & even before I became interested in real estate, my mom would always say that not a lot of people buy houses from areas like that because it’s just not a good area.
So my questions are:
1. Do cash buyers even care if homes are in low income areas or not?
2. Have a cash buyer ever told you that they don’t want to buy homes in areas like that?
Everyone is different some are willing to buy those houses and some aren't, perhaps the larger problem is because these tend to be lower priced properties that have a limited ceiling when they are rehabbed the margins can be slimmer especially for flippers.
Everyone is different some are willing to buy those houses and some aren't, perhaps the larger problem is because these tend to be lower priced properties that have a limited ceiling when they are rehabbed the margins can be slimmer especially for flippers.
There is a difference between low income areas, which can be very good money makers and low income, high crime rate areas which are very hard to make money off because not many people will buy the property in a war zone.
If it is just low income, you may be able to resell the property, but if it has high crime rate too, then it will be much harder.
With low income areas you really have to look at the numbers hard. What rent can be generated and how much is the cost of the property plus rehab?
Rehab is kind of funny because things like a hot water heater costs the same in a $35k house or a $400k house. So sometimes it costs more to fix a low income house that the house is worth.
So for your questions 1. yes, very much so. It is harder to make money on low income areas.
As you run your business, you should be consistently connecting with buyers. As you do, you should be asking them when kinds of properties they're looking for. While I haven't specifically asked this question (maybe I should), I've had a few say they are Ok with C properties, but don't want any Ds. If you've found an area that you think has potential, get on the phone with your buyers and ask them if they'd be interested in properties like those.
Hi @Alexia N. ! Do you have a network of buyers yet? If not, my advice would be to find buyers that are actively buying houses and find out what their criteria is so that you aren't wasting your time on inventory that no one wants to purchase. If you find the buyers first, you will be able to close more deals and build wholesome relationships that will last a lifetime. You can market directly to active buyers with postcards/letters for quick responses. Good luck to you!
@Raven Henderson ... I already have a list of buyers but I just haven’t contacted any of them yet. But I guess it would be best for me to get in contact with them to try to build relationships with them to make it a bit more easier to close deals. Thanks!!!
@Lynnette E. ... The area that I was looking at, I did research & found out it has high crime in the area too unfortunately. I’ll get in contact with some buyers to see if they think the properties are worth buying. Thanks!!!