The #1 Question Everyone Asks:
“How Much Do We Pay For Houses?”
The short answer is: we pay as much as possible and still make a profit. In other words, it has to be a win-win for you and for us. As an Investor, we typically need to make about 10-15% profit after all expenses.
The Math: We will determine the After Repair Value (“ARV”) of your home by using comparable sales in your neighborhood. We then subtract all costs (remodeling, taxes, maintenance, costs to sell, etc), and try to leave 10-15% profit for ourselves.
So how much will I get? Basically, you can calculate all the costs you would have to remodel and sell the home, take that and another 10-15% off the selling price. At the end of it all, you could do all the work and effort yourself and net another 10-15%. On a $100,000 house, you will likely net $10-15k less by selling to us, than if you did everything yourself.
Is it worth it?
and the cost to remodel your home, all the costs to hold it and maintain it for the 4 to 6 mos it will take to remodel and market
THE VALUE IS BASED ON A FEW THINGS
Condition of the Home
Current Market Conditions
Can the Home Be Used as a Rental
The Cost to Remodel the Home
How Much Cash We Have to Outlay
Marketing and Time to Sell the Property
Investors need to make a profit, so their offer is based on how much work your home needs & current market conditions
Most homeowners are people who want to sell for cash OR they want to see other options. Some people want a higher cash offer and we are able to offer terms. The immediate cash offer isn’t going to be the highest. Sometimes we can pay more if someone is willing to accept terms.
An investor needs to net 10 to 15% profit on the investment and remodel of a home. This is after they pay for the remodeling, any holding costs (financing, taxes, maintenance), and any commissions or costs of selling the property.
The investor is going to remodel and improve the home, which will raise the value. They will base their offer on the After Repair Value (the value of the property after it is repaired). The after repair value is calculated by the purchase price plus the cost to renovate.
It is unrealistic to expect an investor to invest $100 – $250 thousand into a home, remodel it, and then sell it to lose money!
The Benefits of Selling to an Investor
Close on the date of your choice
No Marketing or showing the home
You don’t pay for repairs
No Banks, Appraisals or Inspections
You don’t pay commissions or fees
Stop the taxes and interest payments instantly
Beware of Investors who make you an offer without seeing your home…. and who are not upfront about their intentions to actually pay cash themselves.
Use someone local. Use someone who is honest with good ratings on the Better Business Bureau