Why good investors won’t say “We Pay Cash For Houses: As-is & in Any Location”
September 2, 2020
Uh-no...
If I had a nickel for every time I’ve seen one of these signs I may not be rich but I’d at least be a bit better off.
Let’s face it…signs work. I use signs too and I’m not saying you shouldn’t but I will tell you this. Good investors have very specific places and price points they buy in. Why? Because they don’t want to be stuck with a house they can’t sell!
Think about it. If you were a private money lender for a real estate investor that is willing to use YOUR money to buy houses as-is and in any location would you be questioning your decision to lend to this person? If not, you should be.
It's misleading...
If you are a seller who has a house in bad shape in the ghetto you are most likely going to call the number on the sign before you call a realtor, correct? No realtor fees. No people trampling through your home at a moment’s notice. No having to keep your house looking like you could eat off the floor. And less embarrassment if it’s in that rough of shape.
But if you call this number on the sign any investor worth their salt is going to be looking at the neighborhood to see if this house is in a good area. What are the comps? How much will this house be worth if it’s put back into the shape surrounding houses are in? What schools is this house zoned for? Is it a sought after area? Where do the jobs come from? Economic growth? And the list should go on. As a seller, your hopes may be high when you talk to Mr or Miss Investor only to find out they aren’t interested and at best will give you lot price minus the cost to tear your house down…and that may be okay with you!
Be a straight shooter
I don’t know about you, but I really hate it when people waste my time dancing around what they really mean to say. So…I just spit it out, politely. You can be polite and still tell someone you aren’t interested in their home for whatever reason. I’ve had to tell many people they wanted what their house was worth AFTER it was renovated so it was not in my company’s best interest to purchase it. I usually offer our services to renovate it for them while they retain ownership of the property but more often than not they find a realtor to list it at the high price they think it’s worth only for it to sit in the market….forever. And that’s okay. I’m just there to try to help and whatever that looks like for the seller is just fine with me.
Yes, I will buy a house in any condition-just not in any location...
I really like renovations while my business partner LOVES to tear houses down and start from scratch which we do a fair amount of. So I have no issue saying I will buy a house in any condition but you will never hear me say I will buy a house in any location. Ever.
Recently, we looked at a house that was a hodgepodge mess. We really had no idea how we would even renovate it with all the additions added here, there and everywhere….so we tore it down and are now in the process of building a $1,038,000 property. Why? Because it’s right across the street from the beach!:) You can’t do that anywhere and make money. Location. Location. Location.
If you are a seller, ask questions
Ask. Just ask if they buy in your neighborhood. Ask what kind of properties they are looking for. Ask if yours looks like a good fit for them. If it’s not, ask if they know of anyone who it may be a good fit for. Investors often wholesale properties they don’t want or don’t have time to renovate to other investors. Wholesaling is basically finding a buyer for your property for a fee that the other investor pays. They just might know of an investor starting out that will take it on.
If you are a lender, get to know who you lend to!
Flying by the seat of your pants will make you lose your pants! True private lenders…who are everyday people who worked really hard for their money just like you and me…are wise to get to know the values of the investor they are considering working with. Yes, you can make a ton of money as a lender, but you can also lose your pants right along with the investor flying by the seat of theirs! So ask for referrals. Ask about their buying criteria. Ask about what they’ve learned investing in real estate. Ask anything you can think of.
Stop saying you'll do something you won't
I come from a family that does what they say they’re going to do, when they say they’re going to do it, and how they say they’re going to do it. They are 100% predictable and I strive to be the exact same way. Real estate investors can often leave a bad taste when they say they will “buy in any location” and really won’t or can close in 7 days but really can’t. I don’t know about you but overpromising and underdelivering is not my way of doing anything and I mean anything in life. Do what you say to the best of your ability and when you can’t be a great communicator about why. If the deal doesn’t work, that’s okay. Making a friend and treating people well along the way is more important anyway. I’m a strong believer in the saying, “how you do anything is how you do everything.”