Do retail home buyers care about....?
AL · Member since 2010 · 522 posts · 31 votes
Do retail home buyers care as much about home value as investors do? Investors buy to make a profit, so I can see why home values are very important to them. Retail home buyers are buying to live in the homes not to make a profit from buying like investors do. Can you even wholesale homes to retail buyers? If so, how is that possible? You would want someone who can come in and close quick with cash.
Do retail buyers care as much about price? No, it is clear that they are willing to pay full retail and often, over retail to get into a home. With that said, selling to a retail fianced buyer is not "wholesaling", it is retailing.
If your intent is to wholesale and you have or can easily find real deals, then your issue is your lack of a buyers list. That is simple to build and many threads here on how to do it.
Will Barnard Passive cash flow is all I ever wanted from the start. This is why I got interested in real estate investing in the first place. I am not not in it solely because of wholesaling, but because I wanted to create some sort of path to getting me the passive cash flow I want. I know for a fact I am not great at door knocking. I have been there and done that, which is why I am no longer doing that now. I knew some investors that were investing in NPN. At the time I never heard of it. Are there any forums around here I can go to learn how note buying works and how to get started in the note buying business? I am searching long and hard to discover what it is I am good at that would be of great use in RE. I know I must be good at something. I just haven't found out what that is yet.
Yes, plenty of threads on note buying, including NPN.
Of course, to buy notes requires capital and if you start out lacking that, you need to do something to build capital to reach that goal. If wholesaling was your idea in doing that, then you will need to learn how to do what your buyers do so you can succeed.
Will Barnard Wholesaling was my idea to raise capital as a way to create passive income.
Antonio, I am a newbie, so take what I say with a grain of salt (it might hurt a little) but I sincerely understand you and just want to help and encourage you Sir!. It seems to me that if you put together a good deal having read, understood, formulated a plan, and then implemented the plan based on the fundamentals of a good deal which I am sure you can find on BiggerPockets.com, then “They will come”. The buyers will come and they will come again.
If the buyer is a rehabber/flipper ask them about the realtors they use and if they would introduce you to them.
When dealing with sellers, you are dealing with families and people’s livelihood. If you are not certain of what you are doing, you could really put them further in a bind if you tie up their property for a couple of weeks and then pull out because it was not a good deal.
Do your homework before you ever go meet them. Once there, sincerely find out their situation, just listen to them for minute or so before you discuss business. They are folks like you and me and they are in fear of losing their home, their credit, etc. You should already know what you are going to offer before you go there. You should already know this is a good deal.
If you are discussing properties with buyers or realtors and you do not have an equitable interest (a contract on the property) then you are acting as a real estate agent without a license.
It is possible that most realtors see you as a lawsuit or train wreak waiting to occur and do not know how to just be straight up honest with you, or they have tried to be, and you are not listening.
Trust me I’ve been there. Years ago I wanted to be a real estate investor, I made a deal, I ended up being foreclosed on. I can feel your enthusiasm and zeal. I am just saying be sure you understand the fundamentals of a good deal and how to perform your due diligence and how to not hurt yourself legally, financially and most important of all how not hurt the ones you are trying to help.
A good deal is the whole package. A fixer upper in an area that has not had recent comps in over 6 month in my opinion (IMO) is not a good deal.
If I wanted to comp an area without a realtors help, what I did back in the day was, I would go to three or four homes in a 300 yard to one mile radius, no more than that. I would look at like properties (i.e. single story 3bedroom 2bath 1700 sq ft). I would look for sale signs and get the flyers, I would look for pending sales and sold signs and call and ask how much it was selling for or how much it sold for. I would ask how long the home has been on the market or how long the home was on the market (it HAD to be 90 days or less). I would look at the condition of the home and whether it was remolded etc. You can get a good idea of what the market will bear in that area…
Don't worry about real estate agents. Relax, read, go to the wholesaler's forum and read, go to your local REIA club and listen and watch, be yourself, keep your eyes and ears open.
You will prevail. You will put together a good deal, “They will come”!
William Williams Thanks for your advice William. A lot of what you saying is something I suspected a long while back about wholesaling. I know there are risks involved. Nearly all the homes I looked at in my town and the ones outside of my town all have old outdated comps, which is my only setback in wholesaling. Without knowing home values I feel doomed in this line of business. How good is your method to finding comps without the help of a Realtor?
Antonio, I am going to my first REIA meeting tonight at 6:30. I will ask this question. I will reply when I get back. The answer about the comps is "...pretty well". I will begin doing it myself soon... and will update you. I was always in the ballpark though. Usual rule-of-thumb was folks would ask about 10% higher than what they would settle on. So the sale price would normally be 10-15% less than listing price. I suggest you spend some time in the area and try to find some for sale by owner (FSBO's) signs, and realty sales signs. Give em a call and just ask what this is listed for. If they ask to look at property? Tell them your not interested in looking at the properties at this point. What are you looking for? Well I am just looking at few areas to live right now, not ready to make any moves yet, just want to know what it is listed for. Just keep calmly asking for the list price... you will get thru the sales stuff... Now at this point after obtaining the list price, if you are so inclined and you feel you can... ask so how is the area is that list price pretty much what to expect in that area? How long has this one been on the market? I noticed that there are a bunch of empty houses, I am not comfortable with that, whats up with that? You know what I mean Antonio? Build a rapport if you can, you will sense it. People love to talk so get em talking. Just get him/her to talk and you can get a lot of info you need without feeling like you have to let em know what your doing... you will scare em off that way. Only disclose stuff like that in closings and such. Just be yourself and learn the gift of gab... :). Your going to need to learn how to get a thick skin and let stuff roll off you like water on a ducks back and look forward to listening talking to folks and seeing how you can help them while seeing how you can help yourself as well. Especially if you are going to remain in wholesaling and pre-foreclosures and stuff... Will get back to you Sir!
Most gurus are a joke. I get countless emails from investors giving me their sales pitch about how to make $100,000 in 30 days all while sitting at home. They always seem to have this awesome tool that all investors need to make loads of cash with the push of a button. Mail like that goes to the trash. Then there is one guru I guess you can call him that who proves to be the real deal unlike all the others. I usually look for what sales the most. Homes with 3 beds and 2 baths are the most popular wherever I look, which is all I look for.
William Williams I will keep a look out for the response you got from REIA. Thanks.
OMG!!!! $%&^$%&$%&!!! TWO TIMES I HAVE WRITTEN A BOOK AND BOTH TIMES I HAVE MISTAKENLY HIT THE BACKSPACE KEY AND LOST IT!!!!! NUNDESCUT! >:-{
Let me go cool off Antonio and I will get with you. Got a lot to say. Great experience! Somebody Stop Me! As The Mask (Jim Carrie) says SMMMMMMMOOOOOOOOOOOOKKKKKKKKKKKKINNNNNNGGGGGGG!
Good luck with that book.
That argument might hold water if there weren't these pesky little things called appraisals. Based on the fact that a buyer can't get a loan for more than the value of the home, this is one of the most important pieces of the puzzle to a typical home buyer. Especially the past couple years when appraisals became increasingly more "erratic"...