August 17, 2020
We like to be open and honest with our clients. Because of that, we don’t want to sugar coat things and make it sound like working with an investor is best for everyone or that we’re able to help everyone.
So let’s go over one of our frequently asked questions: What are the Pros and Cons of working with an investor?
Here are the Pros in a nutshell:
While we love helping people, we have to be able to make a profit. Some situations make that tough, so we’re not able to help everyone. Depending on the numbers and your goals in the situation, the options may be limited. For us to get involved, we have to either get a good price or good terms (we’ll explain what this means in a second).
First let’s look at price. For us to be able to make a cash offer on your home, we may have to offer substantially less than its appraised value. If this is the case, we certainly don’t mean to insult you, but we are taking on a large risk by buying your property. We will be responsible for repairs, holding costs, marketing costs, and more. And at the end of the day, this only makes sense if we can make a profit when we sell it. For a cash offer to be feasible, we have to get a really good price on the property. This option is only available if you have significant equity.
The other way we can buy a property is if we can get good terms on it. In this scenario we can typically offer a higher purchase price. What does that look like?
For example, let’s say you don’t have much equity on your home. Rather than offering cash for your home it might make more sense for us to take over payments on your mortgage, taxes and insurance while we find a buyer for your property. We sometimes work with buyers who don’t qualify for a mortgage today and need more time, but still need a place to live. After pre-qualifying them and ensuring they are a high-quality potential buyer, we may put them into the home as a tenant until they can qualify for a mortgage.
In this scenario, we’re not dealing with a typical renter who doesn’t have anything invested. We require our tenant buyers to put down a substantial down payment. These are people who view themselves as owners and have every reason to take good care of the property, often even making improvements and repairs since their goal is ownership. You get financial relief because we take over your payments until the property sells.
There may be other types of terms we would suggest based on the numbers and your goals with the property. We don’t want you to agree to anything unless you are completely comfortable with the situation.
Some situations may not make sense for us to get involved, or you may decide it’s not a good fit for you. You have to be willing to work with us on either price or terms. We can’t help everyone. We can only buy 5 – 10 houses per month, which means we have to turn some people down.
If both you and we can agree on a scenario that makes sense for both of us, you’ll benefit from quick financial relief, no fees, and no hassle.
We’d love to discuss your situation more and see if we can help.