What Do We Do With Houses That We Buy?

Home owners often wonder what we do with houses that we buy.  We don’t always have a set idea when we decide to buy a house, we like to get a feel for the neighborhood first. What we offer is usually depending on the condition and area we look at the market value and the rental value if we like the return on investment we will hold it.

This are the main strategies when we decide to buy a property.

1. Fix up the property and rent it

When we buy a house in a area we like, we’ll usually remodel the property and it to a qualified tenant. We like to find tenants that will fix any problems such as leaking faucets or broken toilets.

2. We fix the property up and let a Realtor sell it.

When the house  is assigned to one of our contractors he and his his crew will gut the house and replace almost everything with brand new materials. We paint it, change the carpets, remodel the bathrooms, and sometimes even buy some new furniture and appliances. We then hire a home staging expert who decorates the house we will definitely be selling it

3. Lease Option to a future home owner

A  lease with a option to buy is what some people call a rent-to-own agreement. Rarely will we do this. The price of the house is adjusted to account for inflation. This is very useful for people who are looking to buy a house but do not have enough money for a down payment, or not eligible for a mortgage loan due to poor or nonexistent credit record. We just think it’s stealing if the credit is bad the occupant will more then likely continue with the bad credit and never get to actually buy the home.

4. Sell The Home As Is Where Is What Is

Sometimes we get back logged with to many properties taking longer then normal to fix up. That’s when we will meet with other investors who sell us houses from time to time and we resell your property to another investor who has more time on there hands and needs a project to work on.


5. Wholesale The House to other investors

When we know we have a house that needs a little bit more work or is in an area that’s not easy for us to get to, we might wholesale the purchase agreement to a experienced real estate investor. Wholesaling a house means selling the contract for a modest fee, usually around $5,000.  For example, we might have a house under contract for $320,000 but the real market value (after repairs) is $460,000. In this case, we might sell the contract of $330,000 to a local “rehabber” who will invest $90,000 in repairs, plus the $5,000 on the contract assignment fee. The investor will ultimately sell the house for retail price, thus making $25,000+ in profits.

6. Partner up with friends to avoid all the risk.

In such a case, our IRA  or one of our private lenders might want to provide the funds while we use our local expertise and geographic location advantage to buy the house, fix it, market it and sell it. The profits from such a sale are shared between the two parties. If a private money lender was used to finance the deal, the loan is payed back before the profits are shared.

At the end of the day, regardless of the exit strategy we execute, the end result is [usually] profitable. At the same time, by investing in distressed houses we are able help people who need money fast. After our contractors  are done, they’ve usually turn the block’s eye-sores into the most desirable property in the block; this helps renovate and beautify the city while making affordable housing options available to the local communities where we buy.