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Old 10-02-2014, 08:55 PM
 
1,263 posts, read 1,722,236 times
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I keep seeing signs up like these around Raleigh. What is this all about? How does it work?
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Old 10-02-2014, 09:13 PM
 
Location: Raleigh NC
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they will pay cash and close quickly and turn around and sell the house. their success depends on how much they get off the "open market" value of the home in exchange for getting the owner out quickly and with little fuss.
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Old 10-03-2014, 11:13 AM
 
Location: Winston-Salem, NC
1,266 posts, read 2,375,217 times
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I've always been curious just how little they offer for a home. I would suspect for a home that would run $250k in a decent market but might take a few months to sell, that they would offer well under $200k.
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Old 10-03-2014, 04:55 PM
 
9,680 posts, read 25,699,569 times
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Many of these are frauds.

They never pay you, put a renter in the home, and let both you and the renter lose when the mortgage is foreclosed.

If you get an offer from this type of operator, have it reviewed by a good real estate attorney.
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Old 10-03-2014, 07:13 PM
 
13,816 posts, read 24,768,527 times
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Quote:
Originally Posted by emelvee View Post
I've always been curious just how little they offer for a home. I would suspect for a home that would run $250k in a decent market but might take a few months to sell, that they would offer well under $200k.
80% would be on the high side.

The prime example is if the home is being foreclosed on but there is equity in it. Pretty much the holy grail of RE investment. Easy money. Most people calling expect to get almost full market value - not gonna happen. Some don't have the luxury of time. The most I saw made on an equity deal at one time was 80k, although a buddy made well into the six figures on one in Raleigh.

Also it's a good catch for doing a short sale, people call up with no equity but if you can negotiate a short sale for a good discount you then reno and flip it. Once it becomes an REO most of the deal is gone and it's more a retail buyers market (not always, but generally), it's on the open market. Not really much on the open market is ever a flip target, except in CA.

Involving RE agents on the short sales costs you lots of $$, probably a good chunk of profit, so it's done without agents. However, on the other side of the sale, RE agents sell the home on the open market. The guys who do this for a living have a network of RE agents whom are working the calls for them, from owners who need to sell. The RE agents refer the owners to an investor, who negotiates the short sale, does the flip and the agent gets the property listing when it's listed at retail on the market. That is how I did it at least. It's a lot easier to get referrals than print up signs and have people calling you wasting your time. But you have to walk before you can run.

There are specific forums for this type of thing, not really a Raleigh specific topic IMO.

Last edited by wheelsup; 10-03-2014 at 07:29 PM..
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Old 10-04-2014, 11:39 AM
 
Location: Riverside Ca
22,164 posts, read 27,421,144 times
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Quote:
Originally Posted by emelvee View Post
I've always been curious just how little they offer for a home. I would suspect for a home that would run $250k in a decent market but might take a few months to sell, that they would offer well under $200k.

You would be lucky if they offer you 45% of market value.
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Old 10-04-2014, 07:11 PM
 
135 posts, read 147,683 times
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I luckily was able to get my mom to back out of one of these deals just this week. (The investor never changed the close date on the contract he wrote, said they would close by 2012.) Mom was retiring and south so she wanted to sell but refused to use a realtor. The "We Buy Houses" offered to "buy" it for the balance of the existing mortgage which was about 1/3 of the market value. However, they don't actually pay for the house at closing. They take over management of the property but the mortgage remains in your name, then they find a tenant to do a "rent to own" scheme. The above poster who said the owner and tenant get screwed when the house is foreclosed on is absolutely correct.
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Old 10-07-2014, 06:40 AM
 
Location: Westwood, MA
4,453 posts, read 5,685,482 times
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You'd think that buying houses at 1/2 to 1/3 of their market value would be enough to generate a profit--it seems like the rent to own scheme seems unnecessary. I guess once you've located someone desperate or unsophisticated enough to sell well below market value that they figure they can just completely fleece them.
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Old 10-07-2014, 06:41 AM
 
1,189 posts, read 2,746,756 times
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These signs are usually from people who read "Flipping 101" or took some Carleton Sheets course. They are trying to prey on motivated/desperate sellers and will offer next to nothing for the house.
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Old 10-07-2014, 09:33 AM
 
179 posts, read 233,570 times
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We were offered $120,000 for ours which, of course, we turned down. Sold it for $240,000.
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