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So you want to be a House Flipper HUH? There's only one problem...TENANTS

By
Real Estate Broker/Owner with GoodBuy Homes NJ Essex & Union County Real Estate specialist 0791869

Working in the Real Estate business I meet all kinds of Investors, from the odd balls (I'll buy anything that moves to the over analytical (I am looking for houses with a 10% cap rate)

but I tend to the be the agent that works with Investors and say things to them like "Are you sure you want to buy that?"  they sometimes look at me like im speaking alien or something

Anyways, I have had some serious conversations with investors and their wants and needs in an investment property(s) and I find that they will say things like I want a house for under 50k...that needs about 40-50k in rehab cost, I respond with; "sooooo why cant I sell you a house that cost 80k and needs 15-20k in rehab cost...isn't that the same thing???" again they look confused...lol

So I know a bunch of investors who recently joined the distressed property ownership network, because they left one important component out of there equation; which was the tenants.  You see this investor i know just listed 5 short sale properties with us because he bought 5 houses over the course of 8 months back in 2010 with plans to make around 6k per month in rental income...good idea right? not quite if you get tenants that are not paying you rent.  This guy did not get secured rental income by going the section 8 route or any other rental program and relied on tenants to pay and they just did not pay.  He told me that 2 of those houses were located in the heart of the worst neighborhood and when he went to collect rent; he was met with a not so happy tenant who said and I quote " never come back here to collect rent!"  can you say scarrrrrry!!!

Remember NOT all investors know what there doing, so we must still guide them through the transaction and in most cases long after it closes...

 

It is important that Realtors who choose to work with Investors are advised to be an educator and advisor to those clients about ways to properly secure their investments.  I have a lot of repeat investors that buy often and the reason they keep coming back is because I am upfront and honest and I provide full disclosure and let them know what they are up against so there is no questions to be asked...

Anyone have any problems with Investors or any investor horror stories?????

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