Another advantage of selling to an investor is that they’ll deal with complexities that might surround the close. “Sometimes there’s complex title issues. Like someone died without a will, or there are multiple wills. Retail buyers won’t stick around for that. But because I’m not actually going to live in the house, I don’t care. I’ll wait for nine months, and the sellers will have the advantage of a sure close. I can then offer my services as a sophisticated buyer to kind of shepherd the closing process.”
“I’d say the three major benefits an investor offers is speed, convenience, and risk reduction. I can structure a deal that’s beneficial for them time wise. Sometimes they don’t want a two week close, so I can work with different time frames. I’m also available to do the dirty work- I’ve had times where I’ve had to hall the trash my self from a property- I’ve even worked with estate liquidators. I’d say pretty much any investor, given the right property, would do a lot for the seller. I almost always handle the clean up for the properties I buy.”
No one likes two house payments. Sometimes sellers need to move now, but want to make sure their house is sold before looking for another house. In these cases, investors like Dave would buy the house now and rent it to the family until they found another place to live, again offering the attraction of risk reduction.
The more he works, the more incentives he finds people have for working with him. Again he stresses financing flexibility, and his ability to work with different schedules and situations.
While admitting that some shady investors have given his job a bad reputation, he gives some pointers for detecting quality investors. There’s enough competition out there now among single family investors, that even the motivated seller now has options. Don’t be afraid to ask questions, the more knowledgeable you are the less likely you are to get taken advantage of. “I would ask any investor who wanted to buy my house how many homes they’ve actually done. I’ve had calls where people have worked with an investor, only to discover it was their first deal, and they weren’t very professional. Also, ask for references of people they’ve done transactions with. I would offer this information to anyone who asked- I’d say about 95% of people I’ve worked with have walked away happy from deals with me, and 100% have been satisfied. Another important thing is to ask if they’re actually going to be the person at closing. The last thing you want is to work with Joe Bird Dog, who in his first deal overestimates what investors will pay for your house, then strings you along while he looks for money and ultimately can’t follow through.” The investor also encourages people to ask for earnest money and if it’s an actual company to look them up at the Better Business Bureau, or even Google them.
“The most important thing is to not get caught up on price. The reason you are selling to an investor in the first place is that you want a fast close and to be paid in cash. To accept an offer for $1,000 more from an investor who is half as credible is a false trade off.”