Posted by Ed Garcia on March 13, 2002 at 10:26:08:
It on depends on your deal.
When doing a deal you should always have a strategy as to what you’re going to do with the deal. For example if there is not much profit in your deal and you are purchasing it to flip, then of course you’d better have it pre-sold or you might get stuck with a deal with either little or no profit.
The reason I say that is because if you purchased a deal to flip and then didn’t flip it in the give time, you may end up paying out what little profit you had in the deal, debt servicing the deal.
On the other hand if you purchased a deal at 50 or 60 cents on the dollar, it doesn’t matter what your strategy is, because you have enough room in the deal to do what ever you want with it. If you got stuck with it as a hold property, chances are at that LTV; you’ll have a nice property with a nice positive cash flow. So you wouldn’t have to worry about having it pre-sold. Most buyer do not have the properties they buy pre-sold. However they do have a strategy or game plain for the property when they buy it.