OfflineHi everyone, this is my first time posting. I have searched and searched to see if this has already been covered but couldn't find anything, so I apologize if this has been asked many times over. When dealing with low priced property, such as a home worth $80,000, how much equity do cash investors want in order to even consider the deal worthwhile? Would it be a certain percentage on any priced property or is it more that they always want to make, let's say, over $50k profit every time? Thanks very much for your help and good luck to everyone.
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On what your cash buyers like
People would like to have a house for free.
For instance. let's say that your buyer's lending institution will do up to a 75% cash out refinance (refi). Therefore, the buyer would only want to put up to that threshhold of what the bank will allow.
Let's say the buyer gets a house that will be worth 100k after fix up. Then the buyer would only want to have 75k in the property at max. So buying the house, fixing it up, taxes, and everything else should tally up to 75k or less.
The buyer pays 75k for the house, refinances this house that's worth 100k for 75k (which leaves 25% equity) and get's all of their money back to repeat this process. If the buyer can put less than 75k into the purchase and rehab, they might be able to refinance the property still leaving 25% equity. This is a way for a buyer to get a house for free and also increase their cash holdings. The trick is finding that initial pile of cash...
But as Amy said above, the buyers you find should all have different requirements.
The more thorough the question, the more thorough the answer.
Please fill out your profile with as much info as you're comfortable with.
Thanks.
Sometimes you can sell a house with no equity. If the property is worth $80K, and it rents for over $1000 per month like it does in certain places in California, you'll have no problem selling it. Some buyers just want the cash flow and really don't worry about the prices.
BRE #01956371
How do you find out what your buyers want? I would say ask them. now you would probably be safe assuming they would take anywhere from 20-40K on any deal. But that is part of networking. Getting to know their business and how they make money and how you can help them make money.
Here is how I see it. The only way for you to make money is for them to make money, so find out what they need and fill it
mikessler
keep moving forward!!!
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It depends... If the investor wants to flip property, you'll have to offer 65% of ARV, so that your fee and closing costs, holding costs are accounted for in your offer...
If the investor wants to buy and hold, you can go higher...
Valerie
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