KEEP THAT PROPERTY IN YOUR FAMILY
Washington, D.C. has some of the most gentrified zip codes in the country. That means older folks who’ve lived here for decades, a lifetime for some, have passed the responsibility of their hard-earned equity to their heirs. Maybe you’re one of those heirs. You’re getting postcards and letters from real estate investors promising a quick and easy sale. Ask yourself, “Why?” The answer is: these investors are going to relieve you of the hundreds of thousands of dollars in upside potential your parents or grandparents left to you.
What are you going to do?
Many, most by the statistics, sell at wholesale prices. Most investors will tell you they don’t pay retail. They’re quick. They require no effort on your part. When you see your parent’s home on the market months later at a two hundred, three hundred, or four hundred thousand dollar markup from where you sold it, don’t get mad at the real estate investor.
For years, I’ve watched my native D.C., though not just a local phenomenon, be transformed. As a Renovation Mortgage Specialist, I know my team has all the industry knowledge a homeowner or family heir would need to do the same or basically the same renovation a professional real estate investor will perform.
There’s no magic to what that, “We buy your house in just a few days,” investor will do. Most renovations will take 6 – 8 months. You’ll need a contractor. You’ll need financing. You’ll need to stay on top of the work.
I tell people to think of it as a part-time job that will pay you X hundred thousand dollars in the next year. Once they realize they can hire, for very little, a HUD- Consultant to cost out the repairs needed, down to to the cost of each nail, and that me, the Mortgage Loan Officer and the Consultant will recommend home improvement contractors who can stay in budget and are licensed and bonded, and that work is inspected regularly and even the contractor’s profit is held back until the end, they feel better. I remind them to have Realtor’s advise what improvements will sell the home at their target after-improved value. It’s called a Current Market Analysis, and top area Realtors will do this for free for a chance to list your final product.
There are even companies, I’ve worked with a few, who will do the renovations, No financing from me needed, and get paid at settlement when the renovated home sells for top value. They’ll be more expensive than the cost estimate a HUD-Consultant would approve, but they charge more for the risk they’re taking.
At the least, I’d like to see my neighbors ask each postcard or letter-writing real estate investor if they’d joint-venture on the renovation. Join real estate investor clubs. I guarantee you’ll find investors happy to joint venture with you. You have a valuable commodity, a desirable real estate property. Even if you’re behind on the mortgage or owe tax liens, see the upside potential, the after-improved value at the heart of real estate investment.
If, after knowing all this, you decide to sell to the wholesale investor and be done with it, I ain’t mad at cha.
Grandma might be though.
