Would this be a deal a cash investor would consider....???

Question

if I potentially have a property that was built in the mid 1980s - doesn't need anything but minor cosmetic updates. Great upscale neighborhood - 2800 sq feet - ARV potentially 900-1million. Would a cash money investor accept $710k as an asking price?

FR W. · Answer

Hi, Nathan!  I appreciate you taking the time to respond to the person who asked the initial question above but, I think the reason some new investors are hesitant to pose questions here is because of the way some of the responses they get are delivered.  Your response above makes the person who asked the question, sound almost idiotic that they would even ask the questions the way they did.  Maybe it was not his intent to mention that it only needed minor repairs and then ask about ARV.  Maybe he just doesn't know and was hoping to get responses that would "feel" helpful.

I'm sure it wasn't your intent, but, some of are new here and are here to learn, but when responses such as those are given, it might be a tad difficult for some to step out and ask questions for fear that they'll be made to look like idiots publicly.  My assessment of the situation.

Have a great day!

Nathan Gesner · Answer

You haven't give us enough information. In Jackson Hole, Wyoming the house you describe would be worth well over a million. In my town it would be worth $400,000. In Akron, Ohio it would be worth $200,000. Location plays an important role.

Why would there be an ARV if it doesn't need any renovations? And if it's truly worth $900,000 after some minor cosmetics, why would anyone in their right mind reject a sales price of $710,000? They could put $50,000 into it and make $200,000? Why would anyone in their right mind turn that down?

Adam Martin · Answer

I agree with @Nathan G. that if everything you said is correct no cash investor with cash in the right mind would turn it down.  My question to you is what seller in their right mind is going to sell at a 200-300k discount just to try to entice a cash buyer.  What is so enticing to you about a cash offer that you are willing to pay that much of a premium for it?  The cash offer or financed offer is still getting wired to your bank so while cash is a stronger offer it doesn't command a 20-30% discount.

Edit: after posting I just saw in your post that you are listed as a wholesaler so that may make sense as it isn't you taking that large of a loss and most likely looking to close quick and clean.  Wholesaling is a way we can help distressed sellers solve problems but is it really ethical to entice them to sell at that large of a discount.

Would this be a deal a cash investor would consider....???

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