SIX THINGS THAT SEPARATE INVESTORS FROM RETAIL BUYERS SCOTT CARSON
#1 Purchase Price:
What most real estate
agents immediately struggle with, is that most
investors will not offer more than 70% of market
value or retail price, or less, depending on the
condition of the property. This is true of short
sales, REO (bank foreclosures), and other
lable to them. While this short term financing can
be considered expensive at 8-18%, investors realize that this is short term financing and they
would rather get the deal done and lose a little bit
on the short end, versus not getting the deal done
at all.
properties that they obtain financing for. If the
property needs any type of work, the investor will
#3 Exit Strategies:
reduce their offering price to reflect that, along
profit when they purchase the property, but they
with holding costs. The basic purchase price
can't touch it until their exit strategy has kicked in.
formula that the majority of investors live by is
Instead of simply listing the property on the MLS
retail price multiplied by 70% (mostly 65% in
for
today's market), minus repairs and holding costs.
financing, successful investors have a multitude
Real estate agents are used to dealing with
of exit strategies in order to take advantage of
homeowners looking to purchase their primary
current housing market conditions.
residence and who are willing to pay 90-95% of
strategies range from a traditional sale, to owner
retail. This is just not the case with investors.
financing,
a
conventional
lease
Investors may realize their
sale
with
optioning,
conventional
These exit
renting,
and
wholesaling the deal for quick cash. Open-minded
#2 Financing:
What's most important these
days is getting deals closed. Investors make a lot of
cash offers that are closed with short term loans
from private investors and "hard money" lenders.
Investors make cash offers knowing that they have
this type of short term and short close funding avai-
real estate agents are huge assets to investors,
but those that are not, are more of a liability than
they are worth.
Investors are open to agents
learning more about what they are looking to do,
and being flexible with multiple exit strategies is a
huge key to being successful.