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If you are buying short sale properties or probate properties to wholesale them, don’t skew the numbers

Recently I met a couple of young guys who spent $25,000 on one of those "get rich quick" scams, as I like
to call them.

They were doing everything right getting homes under contract, but when they were buying them at 70% of retail
price they were using the highest comps they could find and not the average.

This always put their numbers closer to 80-85% of retail, then they got upset when they couldn't sell any of them
on the wholesale market.

I really do feel sorry for these two, they are some of the hardest workers I've seen in a very long time, but they
will soon bankrupt themselves if they don't learn.

So if you are buying properties like this, use real comps, not comps that skew the numbers in your favor! With
the internet, everyone has the same information you do, and they are not going to be fooled by your data.

For more information on buying property at wholesale, contact me anytime on the phone or by e-mail, I would
love to see what I can do for you.

Todd Clark - broker
Kastings & Associates
Phone: (503)524-9494
Fax: (503)622-8738
Todd@IFoundYourNewHome.com
http://www.ifoundyournewhome.com/

Posted by Todd Clark (Realtor), GRI (Washington Co, Beaverton Oregon) on 09/13/2007 06:47 PM

Comments (3)

investing, investors, homes, houses, real estate, beaverton, oregon, aloha, sherwood, tigard, hillsboro

This post has been included in Oregon Information Washington County, OR Information

3 Comments on If you are buying short sale properties or probate properties to wholesale them, don’t skew the numbers

funny you mention that. I read an article earlier about this sort of thing with people using their self directed IRA's to do this. I don't advise people to do it. Its for the more savvy type but it can work. They definitely shouldn't use comps that skew things in their favor. If anything I would use comps that skew them against me so that I know I'm safe! Some people never learn and it seems everyone will fall for the get rich quick schemes. I prefer the good old fashion hard work!

09/13/2007 10:14 PM

by Rick Grand (Oregon Real Estate Properties)

Todd

You'll love this one....investor makes offer on a property with 'subject to' financing, 30 days for owner to move out, first rental payment November 1, 2007 at which time we assume the loan of $260K, rent it to an outside party for approximately $1600-$1800 per month, and you give up any equity or appreciation from this point forward.

I speak to the 'seller' who is concerned about the manner in which the offer is written, blah..blah...blah

Market value: $199K. Market Rents: $1100-$1300.

Who is in a worse position? The seller or the investor?

09/15/2007 01:01 AM

by Bill Nazur (Nazur Enterprises, Inc. & BAMG)

Rick - I wrote a blog about doing a self directed IRA to buy real estate. It actually can be a great thing if done right. I've since found out there are only about nine states that you can do it in.

Bill - Wow, sounds like what I do on some of my lease option properties! As long as it is a win-win for everyone involved and the contracts are done right...Could be neither!

09/15/2007 02:24 AM

by Todd Clark (Realtor), GRI (Washington Co, Beaverton Oregon) (Kastings & Associates, Beaverton Oregon Real Estate)

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