We finished the rehab on The Rent-Back House last week, and listed it for sale last Wednesday…
As of yesterday morning, we had about 15 offers, from both cash buyers (investors) and owner occupants. None of the cash offers were full price (though close) and most of the financed offers were well over asking price. We spent the day trying to decide if we wanted to go with the lower cash offers or the higher financed offers.
While we loved the idea of an extra $10K from a financed offer, the reality is that the property probably wouldn’t appraise for much above list price (if at all). On the other hand, the cash offers were from out-of-state investors who hadn’t even looked at the property, so there was always the possibility that they were throwing out offers without running the numbers and would back out or try to renegotiate during due diligence. To add to that, while the cash offers would normally be much preferred because they could close quickly, we have a deed restriction on this property that won’t allow us to sell for another month anyway, so there is no time lost by going with a financed offer.
All in all, it was a difficult decision. After going back and forth all day with the agents (who were practically bribing us to take their client’s offer), we finally decided to go with a cash offer just under list price with a large deposit. They have 5 days for inspections (they’re an investment group out of California and haven’t seen the property), and they’re ready to close next week; but we still have a deed restriction that won’t allow us to sell the property until March 15.
I’ll post more once we get through inspections…
That is a great debate to be able to have. Just think someone working at McDonald’s would love to “HAVE” to make that decision.
Tom –
Looks like I’ll be job-hunting in a couple weeks… 🙂
Hedge fund from California or private investors? People are getting crazy, works out good sometimes.
Hey Steve,
It’s an investor from CA…based on the name of the entity purchasing and the POF for only $2M, I’m guessing it’s a private investor fund (not a hedge fund). I’ll take it though! 🙂
Hi Scott,
Thanks for sharing your house flipping experience. It’s very helpful.
A quick question:
When you sell the houses, do you list them as SOLD ASIS / NO DISCLOSURE? Or listed as regular sale?
Michael
Hi Michael,
We always provide a full disclosure statement with everything we know about the property. We want our buyers to be 100% comfortable with their purchase, as happy customers are good for business… 🙂