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I know quite a few RE agents but one just mentioned something that I haven't heard before.
He mentioned that he has an "investor" who will buy a property cash and then resell it to you at 1% mark up. It makes sense but just haven't heard of anyone doing it. I feel like I am missing something here.
Example:
House comes onto the market at 750K
I want to make an offer but still need to sell my place.
I use this "investor" who is able to make an all cash offer at 730K and most buyers will accept all cash vs offers with contingencies.
Escrow is closed in 10 days.
This give use more time to sell our place and get our ducks in a row.
We sell out place and buy the property from the investor at 737-740K with 90 days.
This seems very risky for the investor. The risk-reward is out of whack. So much so that it seems like a scam. But at first blush it doesn't seem like you have anything to lose by going into such an agreement. The risk is on the investor trusting that you will perform.
I know quite a few RE agents but one just mentioned something that I haven't heard before.
He mentioned that he has an "investor" who will buy a property cash and then resell it to you at 1% mark up. It makes sense but just haven't heard of anyone doing it. I feel like I am missing something here.
Example:
House comes onto the market at 750K
I want to make an offer but still need to sell my place.
I use this "investor" who is able to make an all cash offer at 730K and most buyers will accept all cash vs offers with contingencies.
Escrow is closed in 10 days.
This give use more time to sell our place and get our ducks in a row.
We sell out place and buy the property from the investor at 737-740K with 90 days.
Is this common?
The myth that "cash buyers" can get discounts from sellers is not borne out by any data -- sellers are not stupid. They get CASH AT CLOSING regardless of how the BUYER chooses to pay for the property. There is NOTHING MAGICAL about a cash closing... It is pretty uncommon for a seller to have everything boxed and ready to go in 10 days, heck I have been involved in 60 or 90 day closes where the seller is still scrambling to get the Mayflower truck loaded the morning of close. Where the heck is the seller going to move just 10 days after listing? They'd want a PREMIUM so they could afford to hire movers to put everything in storage and live out of hotel!
The scenario you mentioned would very likely cause many lenders looking at the quick transaction to be extra super worried that there is other than an "arm's length sale" and the lender might order extra appraisals that might make the deal fall apart...
Beyond that, is the investor going to get inspections? How is that paid for? What about cut over of utilities? Record deed? Pay closing costs? Pay the sales commission(s)?? Lots of things that very quickly could exceed their "1% fee"...
If the investor is trying to act as a mediary that would require them to have a real estate brokers license and then they'd also be subject to ethics investigation just like straw buyers were complicit in discriminatory practices that resulting in racial flips of some neighborhoods...
My guess is that the "investor" has cooked up this plan to try to capitalize on the speed with which some homes get snapped up in hot market but I doubt there is any success to this -- frankly it makes the real estate agent look clueless too. Run away...
I've heard of parents helping adult children in really hot markets, although in that case *I THINK* the parents gave them cash with the understanding they would then obtain a mortgage to pay the parents back. Or something.
If the investor is going to waive inspection when he buys it, are you going to have it inspected? Before the Investor buys it? Before you buy it from the Investor? What happens when you find out the AC is shot and there's $10,000 in foundation issues? Sounds like trouble brewing.
I know quite a few RE agents but one just mentioned something that I haven't heard before.
He mentioned that he has an "investor" who will buy a property cash and then resell it to you at 1% mark up. It makes sense but just haven't heard of anyone doing it. I feel like I am missing something here.
Example:
House comes onto the market at 750K
I want to make an offer but still need to sell my place.
I use this "investor" who is able to make an all cash offer at 730K and most buyers will accept all cash vs offers with contingencies.
Escrow is closed in 10 days.
This give use more time to sell our place and get our ducks in a row.
We sell out place and buy the property from the investor at 737-740K with 90 days.
I know quite a few RE agents but one just mentioned something that I haven't heard before.
He mentioned that he has an "investor" who will buy a property cash and then resell it to you at 1% mark up. It makes sense but just haven't heard of anyone doing it. I feel like I am missing something here.
Example:
House comes onto the market at 750K
I want to make an offer but still need to sell my place.
I use this "investor" who is able to make an all cash offer at 730K and most buyers will accept all cash vs offers with contingencies.
Escrow is closed in 10 days.
This give use more time to sell our place and get our ducks in a row.
We sell out place and buy the property from the investor at 737-740K with 90 days.
Is this common?
You think an investor is going to help you for what amounts to 4%ish yearly return?
Are you for unlawful carnal knowledge of this investor?
What happens here is similar but different. Investors are engaging sellers in exclusive contracts at the list price and then selling the CONTRACT for 10% over list to the next investor buyer. The sellers think they are getting a quick close/max cash/no realtor fees, investors have no skin in the game but like $1000 in earnest money that they walk away from if they can't get someone to buy the assigned contract. Investor never takes title or writes more than the one check, assigns sales contract to next investor buyer who has his ducks in a row already but wasn't savvy enough to spot the opportunity for the flip himself.
I know quite a few RE agents but one just mentioned something that I haven't heard before.
He mentioned that he has an "investor" who will buy a property cash and then resell it to you at 1% mark up. It makes sense but just haven't heard of anyone doing it. I feel like I am missing something here.
Example:
House comes onto the market at 750K
I want to make an offer but still need to sell my place.
I use this "investor" who is able to make an all cash offer at 730K and most buyers will accept all cash vs offers with contingencies.
Escrow is closed in 10 days.
This give use more time to sell our place and get our ducks in a row.
We sell out place and buy the property from the investor at 737-740K with 90 days.
Is this common?
As others mentioned, it's a huge risk on their part. Why wouldn't they keep their money invested? Last year the S&P had an average return rate of 15%. They would likely double their gain in the market (over the same 3 months); and not have to worry about you and an asset.
Sounds like a scam. I'd check into the agent a little further.
Quote:
Originally Posted by BizrulesSD
It makes sense
It really doesn't.
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Even if real, sounds like MUCH is not accurate...
