Posted by JD on February 25, 2002 at 10:16:20:
Yes, I do rehab properties full time. Yes, I did read you comment about why an investor would sell at 80%. It just doesnt hold water. In the real world there aren’t enough deals out side of war zones that can be bought at 50-60% of market to justify such a strategy.
80% homes… - Posted by Bryan (VA)
Posted by Bryan (VA) on February 22, 2002 at 07:54:18:
There is a company in my area that buys homes, rehabs them and then flips them to investors at 80% of FMV. Does this sound peculiar to anyone? Why wouldn’t they just resell at FMV themselves? Any input is much appreciated…thanks.
Re: 80% homes… - Posted by ScottB-NC
Posted by ScottB-NC on February 22, 2002 at 22:45:36:
Because they can sell them to novice investors with no money down with some of the programs that are out there right now at 80% LTV’s. The new investor can sometimes even get cash from seller to sweeten deal. That way the seller gets to sell alot more houses at 80% LTV to people no money down (more buyers with no money than with money)and make more profit on volume that messing around with Owner Oc’s who are a pain in the ***. Also the new investor gets 20% equity, but more importantly a rental property that cash-flows. Make sense?
Re: 80% homes… - Posted by JD
Posted by JD on February 23, 2002 at 21:44:15:
No, it does’nt make sense. Byran was wondering why a sophisticated Seller would sell at 80% of market, not why a buyer would buy at 80% of market. I would never sell a house I just rehabbed for 80% of market. I’d sell at 90% if there was no realtor commission to pay, but not 80%.
Re: 80% homes… - Posted by ScottB-NC
Posted by ScottB-NC on February 24, 2002 at 14:43:00:
Apparently you didn’t read my entire post but skipped the middle of it explaining why “we” investors sometimes sell at 80%, and you instead chose to retort with your harsh reply. I said, “That way the seller gets to sell alot more houses at 80% LTV to people no money down (more buyers with no money than with money)and make more profit on volume than messing around with Owner Oc’s who are a pain in the ***.” When I buy 5 houses at 40-50% FMV and can do a rehab to get it rentable condition and I am in it for 50-60% FMV why would I putz with holding costs to find a retail buyer or screw another investor by selling at 90% where he has potentially no cashflow and needs money down, when I can blast them all out the door to investors at 80% LTV - make my 20-30% and leave them a good deal. Do you do rehab into rental deals from which to give advise? How many houses did you do last year and what was your net? If you want it to be more, give this stragtegy some serious thought. If not, don’t rain on someone esles parade just because you don’t want to come.