Is 55K too small for a $735,000 house?

If they are looking at the numbers, which of course they are, that is only 7.48%. Pretty low for an investor. Unless you find a buy/hold guy, as you have said. They will buy with skinner numbers.

How much is your fee? You say you don't want to lower it and I understand that if it is only $5k or so, but if it is $50k, you may want to reconsider-especially if time is getting tight on your contract. If the deal falls through because you can't get a buyer, that equals $0k.

Best of luck!

Karen

But then if I have to lower it Ill have to split it with another investor if they bring a buyer and also would have to give back to my money guy if they're not putting up the earnest money so it will be smaller than that I mean way smaller...I mean, shouldn't lock it up and just bird dog to them for if I wanted that small of a fee you know? And not only that my buyer would have to go through a short sale, damage her credit before she even gets a chance to buy another property because she has to move out of state so lowering isn't going to help any...

It is very difficult when you ask for advice and don't give the details for what is happening in a deal. This is all very evasive.

Karen

Is it worth $735k? or ?

Not sure I am getting the whole picture...With 65% LTV and $55k of equity in the conversation, how is a short sale entering into the picture?

the property is worth $790,000 they could possibly even get it at $800k if they get in the right buyer making that a $65k pay day...so why would I let them run away with a $100k profit without having to do anything if I cant runaway with not even a $10k profit without having to do anything...I understand its about getting the deal done, but I think its a double standard when we have to leave enough meat on the bone for them when we hardly get anything ourselves...I'm not denying its about getting the deal done or do what you have to do to get it done but if I wanted a small profit I can just go for the smaller deals that are out there just as well...I came across this and I wanted to get ahead on this because there are all these buyers claiming they can buy high end properties and claim that if the price is right and the terms are right then they'll buy it...but as soon as I get one with just enough profit im pretty sure you can nibble for quite a few months but they're no where to be found well here's one that does pretty much fit the mold of what you are asking for without having to do anything...you can even sit in the pool and swim until it sells or rents...Most investors work for a 60k profit and get just about that after closing costs anyway so why not get it without having to work for it? I mean if this was a short sale I'm pretty sure they'd jump on it for the same reason...you can get 60k without having to work for it...its as simple as that...I even said I'll subtract some of my fee to help with closing costs...So if that's not a good deal and a money savor I don't know what is...

I said IF it was a short sale theyd jump on it for the same 65k profit without having to do anything for it...please read carefully...not to be rude or anything I just don't like to keep explaining myself...that's just me...

But anyway, I know someone will happy to have 60k instant equity in their pockets, regardless of whether or not if they have to do any work to it...

Karen, that IS ALL of the details...Property remodeled, asking $735,000 worth $790,000 comes with pool, 6 beds and 6 baths she's moving out of town so she needs to sell quick...instant equity 55k-60k what else is there to know? *shrugs* Im not sure what its renting for because shes not renting it that's what the due diligence on the buyers part is for...no back taxes no liens I don't know what else to tell you guys...

Karen, that IS ALL of the details...Property remodeled, asking $735,000 worth $790,000 comes with pool, 6 beds and 6 baths she's moving out of town so she needs to sell quick...instant equity 55k-60k what else is there to know? *shrugs* I'm not sure what its renting for because she's not renting it that's what the due diligence on the buyers part is for...no back taxes no liens I don't know what else to tell you guys...

Usually a true investment property needs work in order to bring the value. Move in ready properties usually go to an owner/occupant. We NEVER waste our time trying to wholesale move in ready properties. The margin to truly make a profit is not there. If it is actually worth $790,000 your seller should list it with an agent and make the money. You move on to a real deal. If your investors are saying no, you ain't gonna convince them otherwise!! On to the next one and take what you learned about a property you can't sell or a fee you can't collect.

Finally, as a rental, how are you going to cash flow a $750,000 6 bedroom house. How much would the house or each bedroom have to rent for to just break even? Most buy and hold investors are in the entry level housing market.

That's not saying there are not investors that would do this if the numbers were right, but as wholesalers we look at deals that appeal to the vast majority of buyers, not the small minority.

One last thing. JEVON!!! Sometimes it is better to take a VERY SMALL fee in order to get a deal done. You will be surprised how your business grows and how much REAL WORLD experience you will gain. Sometimes this is worth WAY more than the money. Be a stubborn hold out and get nothing or make a few dollars. Which is the smarter business model??

Michael

Well I just reduced it from $735,000 to $720,000 giving them now an equity of $70,000...Hope this helps...

Realtor commision on $790k is 47,400 leaving a net profit of $7600, not accounting for any holding costs.

If holding and renting, let's assume $1,000/room/month = $72,000 gross income, less 30% for expenses (21,600) , for a net income of 50,400. That's a 6.8% return on a cash purchase of $735,000, IF the rooms were rented for $1,000/month.

Vonny, if you were an investor, would you pay $735,000 for the property based on the above numbers?

As always............Solid Sound Advise....... Listen to them Vonny....Cause Nothing From Nothing Leaves Nothing.....

Regards,
Sharon

Why do I need captcha on my own post???? ugggghhh....that's another topic...anyway...back up you guys, the property is with a realtor already, the realtor is only getting 1% in commission so that's 1% of closing costs already taken care of and its being paid by the seller so subtract my new price which is $705,000 with 85,000 in equity minus $28,000 the profit will be at least $42,000....I say that's quite the easy pay day...

MIH Properties I know more about my deal then this post and you'll see that I got this...

TRSD read this post and tell me would you buy it based on the new numbers that I just provided...

Im not trying to sound like a smart alik or anything and advice is appreciated but this site is all about thinking different and making the "impossible" possible that's what Dean is always teaching us to never run from a deal because the numbers seem scary that just tells me that investors are greedy and not into helping people sell as this is what this is all about...are you all trying to teach me the opposite of what dean is teaching and becoming the nay sayers to my ears and make me doubt my first mind? I don't think Dean would appreciate this as this is the time that I need a cheerleader on my side the most...There is nothing wrong with trying right? You cant say that cancer is unbeatable if millions of people beat it everyday...So therefore you cant say a property is unsellable if people are selling selling properties everyday...Right?

Helping people think a little differently to get the deal done IS one of the things this forum is all about. You are getting valid input on how buyers think, and how other wholesalers get the deal done. Your original post was asking the question is 55k too small. Apparently your buyers think it is, and I have a feeling they are not true buyers anyway. You may need to get some different ones. No one is trying to talk down to you everyone is trying to show you all the sides to the deal, and what you could do to get it done and off your plate. It is just advice from experienced investors and you can do with it what you will. Best of luck getting your deal done.

Deals are all about the numbers period. We all like to help people but the bottom line is the numbers. I can't help some one and lose money or not make what I would on some other deal. Business is business and that is what this is. Unless you want to set up some charitable organization.
Again, Jevon, these move in ready get instant equity deals are usually based on the highest possible blue sky sales price. 6% return at best is what I see, IF there are no holding costs (the thing sells for full retail in 30 days or less)
I certainly am not trying to bring you down, but I won't cheerlead on a blue sky deal either. Have to be real you know.

I hope you find a buyer and sell this deal. Nothing is impossible!

Michael

Vonny, if my cash flow depended on renting rooms to college students in a 6 bedroom house at $1,000/room, probably not. Relying on a retail flip that was bought at 90% of market value while interest rates are beginning to rise, probably not. As Michael said, deals are number driven. Sometimes the math works, sometimes it doesn't. The investors you have been dealing with seem to be telling you the numbers don't work.

None of you are paying attention to what I have to say obviously so this topic of discussion has ended, its going no where thanks for your opinion anyway but I don't need anymore of them...thanks...bye...happy investing...

Hey, everything is ok...I definitely didn't feel as though anyone was trying to put you down Vonny. Your posting actually was written in question form rather in an informative/statement form. With that said, everyone assumed you were asking for advice and were just trying to help. I actually am glad that you placed this question on here...because even though I am not yet studying this yet (have to go check out the seminar first)I still am researching on my own and looking on here from time to time to just read some real life situations and how many of the REI's here solve them. It's really cool and great to be able to work for yourself and have some free tools available to you at anytime! That's a great perk! I say just read the comments and consider their thoughts as they have considered yours. Somewhere down the line, someone's advice just may help you and vice versa. Also, I'm not sure if you realized it or not...but even I recognized (am I'm completely clueless as of now about REI ) that you had left some info. out at times, and then came back later with additional info. It's not saying that you made a mistake and did wrong. I'm sure they only asked for more detail so that they can completely help you. You can never give an accurate/close to accurate diagnosis..if the patient doesn't reveal the complete problem...by not stating everything there is to know...a mis-diagnosis can occur...and I believe that they didn't want to mis-advise you...being that this is a community that looks out for one another -and so far looks like a positive one at that.

All-in-all, take everything and whatever works for you does and what ever doesn't you can pretty much leave it for someone else to possibly use. We all have to learn from someone.

Lastly, I pray that you have your deal completed soon! And I pray that it rewards you beautifully! Keep up the hard work and NEVER let anything get you down!!!!!!!

*Is it a luxury home? The house sounds awesome!!!!!!! I would have simply bought it for myself!!!!!! lol....seriously!

Take care and be blessed!

At the top of this forum, KarenG gave this real formulae.

The only other Teacher/Guru I follow has a saying: "Pigs get fat - Hogs get slaughtered"

My Grandfather had a saying; "Merchandise on the shelf gathers dust...not profit"

A hunk of cash, even 5-10000 would light a fire of incentive to go out and get another deal in the fire; truly a better use of your energy.

Good fortune in any case.

Gentle Ben

Vonny, you're just using the wrong tool for this deal. It's too thin for an investor. This is a deal for a retail end buyer who will occupy the property. You could make bank on this deal with a lease/option rather than trying to wholesale it to an investor, especially with a realtor willing to accept a 1% commision. There are many ways to profit from a deal, wholesaling is just one way. There is also subject to, and owner financing in addition to lease options and other methods. Think of yourself as a mechanic with a tool box. Wholesaling is like having a wrench in your tool box, lease options are like a screw driver, seller financing is like having a socket set, etc. Which would you rather do, look for problems you could fix with just a wrench, or have the tools available to fix other problems also? You can be like the dealership that fixes anything or you can be like a muffler shop, your choice. Just my opinion and I may be wrong.

buy and hold:)

Great idea!

Karen

Such hostility. It seems to me that you don't really have a long buyer's list and your trying to force feed the deal to only a handful of investors. I may be wrong, but that's my take on it. I would make a friendly suggestion to extend your buyers list. Good Luck!!!