Frequently Asked Questions
Questions about selling
This is the big question of course, I’ll explain how we come up with an offer:
We look at the similar houses in your neighborhood.
1. What’s been done to them?
2. What did they sell for?
We come look at your home.
1. What repairs does it need? Does the roof leak, HVAC work?
2. What updates will it need to bring it up to the full retail value?
3. What unexpected things could we find once we get into the renovation?
We take the estimated future renovated retail home value, and subtract the costs to fully repair and renovate it, minus a cushion for unknown factors and hopefully an eventual profit.
Your offer is basically discounted for the price and convenience of not having those repairs and updates completed yourself.
We will look at everything to ensure that our offer is the best that it can possibly be for you.
Short answer, nope.
We buy 100% As-is, you don’t have to fix anything or worry about inspection repair lists.
1. If you list your home with a realtor, you may appear to get more on the
surface, but after the commissions, inspections, closing costs and
headaches, that seemingly larger number starts to shrink very quickly.
When you get ready to move, you can leave behind whatever you want.
1. We’ll clean it up and haul anything off. Take what you want to, we’ll deal
with the rest.
2. Moving is difficult and expensive, we’ll do our part to make the process
easy and as painless as possible.
To us, and for you, as-is really does mean just that.
We’ll come to your house and make an offer after reviewing the repairs,
neighborhood comparable sales, etc.
We’ll set the closing date based on your timeframe.
i. If you’re ready to close fast, we can make that happen in a matter of days.
ii. If you need more time, that’s fine too. You’re in the driver’s seat.
We won’t come in and out of your house making inspections, showings or other headaches.
i. Our goal is to make the whole process as smooth, simple and pain-free as
possible, and we pride ourselves on this.
We pay cash for your house.
i. There are no loan approvals or appraisals to worry about.
ii. No hoops or processes to work through, any of which could make the sale fall
through with a traditional buyer.
iii. This speeds the process up considerably. In most cases we’re ready to close as
soon as the attorney’s have the title work and closing documents prepared,
which is usually a matter of a few days.
You don’t even have to go to the closing if you don’t want.
i. Many times, our sellers will be out of state or have work conflicts.
ii. We can have the documents drawn up by the closing attorney and send them to you. All you have to do is sign them in front of a notary and send them back.
iii. The closing attorney can either mail you a check, or wire your money directly to
your bank.
It won’t get much easier than when you sell to us!
Questions about Buying
That’s something I hear often, its gets repeated from person to person, but has no actual basis of fact. Unfortunately these statements originate from propaganda, and are often politically motivated.
We do not buy houses that are on the retail market, or that would even qualify for a traditional mortgage.
1. We buy the broken houses, the smelly ones that no one wants. Often these houses have been sitting vacant for sometime, creating safety hazards and bringing down the neighborhood.
2. We are not competing with homebuyers, in any scenario. We have to buy houses cheap, very cheap, in order to cover repair costs and unexpected expenses.
3. The houses we buy are not eligible for traditional mortgages, therefore they are out of the reach of the average homeowner. They will often need roofs, HVAC, plumbing, electrical and structural work before we even get to flooring, paint and the other ‘fun’ stuff.
We also do not raise home prices.
1. When we renovate a home, we bring it up to the current standards or the neighborhood, which will bring the home’s value up to the other homes in
the local vicinity. Then we price the home at or just below the current market value.
2. Over rehabbing a home, which means renovating it to a level much higher than the other houses in the neighborhood, will only cause the flipper to
lose money. You can’t force prices up, everything is tied to the natural ebb and flow of the economy and those in charge of such.
We actual create inventory, which helps solve the housing shortage and affordability crisis.
1. When we take a home that is falling apart and unlivable, and return it to usable condition for generations to come, that is creating new inventory
that was previously not available for homebuyers.
2. This results in the same effect as building a new home that previously didn’t exist.
We do not, but unfortunately this does happen sometimes.
On the good side, this industry quickly eliminates those who do this.
1. Those characters will get eaten alive by home inspections, and they never last long.
We have been doing this for well over two decades. We now what to look for in a house, and if we find something, we fix it.
1. I want to be able to drive by that house in 30 years, see kids playing in the yard and still be proud of what we did.
We only use quality contractors and are always open to any and all buyer inspections.
1. We eagerly work with our buyers to resolve issues that arise from inspection reports.
This is a decision that you will have to make for yourself of course, but here are some things to consider.
1. Attempting to time the market is never a good idea. You’re going to miss the boat one way or the other. You’re guaranteed to feel like you either bought too soon or waited too long.
2. Real estate is not a short term investment, so don’t treat it as such.
3. Buy when you are ready, and only what you can comfortably afford.
4. Yes, real estate as a whole does generally always appreciate over time. However, inside that timeframe there can be many small up and down corrections.
5. Remember, wages and rents will increase over the years, but your mortgage payment will stay the same. Barring unforeseen events, this means that your living expenses will effectively go down as inflation drives everything else up. Meanwhile, your home will appreciate over time and your principal balance will go down.
6. Don’t forget the tax advantages that come with home ownership as well.
7. The only question is… what are you waiting for?
Questions about Investing
I have been buying and selling real estate, building new construction spec homes, and managing rental properties for going on three decades. Our track record is proven, verifiable, and extensive.
i. Upon request, we can provide dozens upon dozens of closing statements, showing where we purchased the home and then resold it later at a significant profit.
ii. The lender and/or investor will show up on the closing statement and always be paid in full, first, whether we make a profit or not.
All investments are fully secured by real estate.
i. We only buy at a deep discount, we do not push the market, ever.
ii. Even in an economic downturn, we are always positioned well enough to reduce the price as far as necessary to sell the property, and first, as always, get our investors money, including their profits, back to them.
iii. Our properties are never ‘upside down’ or ‘under water’, therefore we can sell in virtually any market.
iv. We do not speculate or gamble, our investment model is based on a very strict system of analyzing properties, buying deep, making the necessary
repairs/updates, and going back to market as quickly as possible.
Regardless of whether we make a profit or not, our investors do, every time.
i. Our investors come before everything, and that includes your expected return on that investment.
A. The returns to our investors typically average 8-10% annually, with a much more stable product that is secured by real, physical assets.
B. Typical money market account returns will range from 0.01% up to about 2% annually on the very high side.
C. Very well managed 401k’s can average 5-8% annually, but that’s only if you take a very long snapshot view. In the shorter term, negative returns of 20% or more can be expected.
D. If you look at the S&P 500 over the last 30 years, you’ll see an average rate of return of 7.31% annually, when adjusted for inflation. Again, this is looking at a 30 year view, inside of that span you’ll find more than a few years of negative returns.
E. It really depends on your investment goals and how long you’re willing to tie your money up.
i. Our typical turn around time is 4-5 months on a house, from purchase closing to sell or refinance closing.
ii. Our fast turnaround time keeps the investments flowing in and out, never tied up in a property long enough to experience extreme dips or downturns.
When we put a property under contract to purchase, we will send out the summary ‘hot sheet’ offer to our investor list.
i. This summary will have the pertinent information: Property, purchase price, repair estimations, projected After Repaired Value, comparable properties used to determine ARV, etc.
ii. Also on the sheet will be the annual interest rate offered for the investment, as well as expected turn around times.
iii. Investment opportunities for each property will be on a first come basis. Once an opportunity is accepted by an investor and the initial offer agreement is
signed, the funds must be wired to the closing attorney within 48 hours and will be held in escrow until the title work is completed and the property is closed. If for some reason the property is unable to close, the funds will be returned and that opportunity cancelled.
iv. The investor will have a fully executed and recorded lien on the property, with full rights to be paid in full upon the sale or refinance of the property.
Obviously, there is a whole lot more to it than this, but that should answer most basic questions to help you decide if it’s a fit for your investment strategy, or if you would like more information.