I posted thiis as a reply/comment to a discussion going on about investors. Well they used the term flippers, which I don't like at all. The general feeling seems to be that an investor is ok if he fixes up a house before he resells it, and that if an investor buys a house and sells it for a profit without fixing it up he was a vulture. That it was unconscionable for anyone to make a profit without first fixing up the house.
I'm an investor and I am not a vulture. Here's my comment:
I have to weigh in here. I am an investor. My partner is an even bigger investor. We make offers to purchase homes in short sale.
Sometimes the houses are in great condition and sometimes they need a little work. But the one thing they all have in common is that they all have a very poor financial condition. It is that financial condition that we aim to stabilize, not necessariy the physical condition of the house.
We make offers on short sales. Without our offer, most banks won't even begin the negotiations. It is our offer that helps get the seller out from under his overencumbered house. It's the first step.
Some of these homes we have bought are totally beautiful, but have been on the market for 794 or 440 days. Would the agents above who criticize investors as being sleazy and vultures rather have their clients sit through another 300 days of uncertainty?
We make offers to purchase and we even provide the short sale negotiation at no cost to the agent or seller. When we get an acceptance from the bank we close and take title. We wait whatever time that lender wants us to wait, and then we find an end buyer and close with them
Sometimes our profit is as little as 7.5%. Occasionally it is as much as 20%. We work for it. We improve the financial condition of the home and allow the owner to move on.
What about this is not honorable? The seller isn't going to make anything on the sale of the house in short sale anyway. Why shouldn't we profit? The agents get paid.
Are we hurting the bank? No. They'll get every penny they want from an investor's offer and a deficiency judgment. It's the lender who is unconscionable!
If we could give the seller anything, we probably would, but we can't. By the way, we won't even do a deal with a lender who won't sign our waiver of deficiency judgment.
How does that make us vultures? Do you think your doctor is a vulture because he makes money from sick people? I don't understand this problem agents have with investors. OK, I've met my share of fly by nght so-called investors who place an option on a house and never take title to it. But to lump us all into the same package is unreasonable.
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