What are the downsides to selling to an investor?
As with anything else, there are pros and cons to selling to an investor. One of which is that the price would be lower because investors need to make a living so they bake a profit margin into the offer.
As with anything else, there are pros and cons to selling to an investor. One of which is that the price would be lower because investors need to make a living so they bake a profit margin into the offer.
Another downside is that things can move really quickly which can be a problem for those who need some time to think about things.
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Fernando O. Angelucci is the Founder and President of Titan Wealth Group. He also leads the firm’s finance and acquisitions departments. Fernando Angelucci and Steven Wear founded Titan Wealth Group in 2015, and under his leadership, the firm’s revenue has grown over 100% year over year.
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Now that we've talked about the positives and the pros of selling to investors. Let's talk about some of the downsides of selling to investors.
Well, one of the downsides of sign to investors is usually your price is going to be lower than what you'd be able to get if you listed the property. The reason for that is that investors are doing this to make a living. This is their full time job. So there needs to be a little bit of profit baked into the offer, so that we can go out, get the funds we need, rehab the property, and then either sell it or hold it as a rental in a condition that somebody would either want to live in or purchase the property. Another downside of working with investors sometimes things move very quickly. If you're someone that needs a lot of time to think things over, if you need a lot of time to process things, selling to investor may not be the best route, because usually from the point of getting the property under contract, we're already going to be ready to close in 15 to 30 days.
So for example, if you need to settle in a state, if you need to go through a bankruptcy proceeding, if you have any type of pending lawsuits that the property is attached to, selling to investor may not be the best route If you need time to figure these things out before you close on the property. Another example of maybe having a negative experiences with investors is the fact that, if you need to stay in the property for a given amount of time while you're finding another property to live in, selling to an investor may not be the best option again, because investors are going to be trying to close quickly, as soon as they borrow the money the ticker starts on the interest that they're paying to their investors. So they as soon as they close on the property they want to get into the property they want to start the rehab process and then either sell or get a renter in there as soon as possible. If you need to stay in a property after you sell it, because you need to use the funds to go buy another property, it might be better to go with the retail route and list your property with a real estate agent.
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