Question:
“I inherited a fixer-upper house in L.A. We put it on the market yesterday and today we already have 6 offers. Is that normal?”
Answer:
There is a strong demand for fixer-uppers right now by “fix and flip” groups. So when selling a fixer upper, the trick isn’t so much getting offers, it’s choosing the right one:
- Avoid “blind offers” – an offer from an investor who hasn’t seen the home. Some investors shoot out offers to “tie up” a home, THEN go look at it to decide if they want it and at what price. Many cancel or try to get the price down.
- Be careful of “faux cash investors” – investors who say their offer is cash, but are really getting a loan from a “hard money” investor who has to approve of the home. Many close, but some don’t.
- Avoid “skinny investors” – investors who make cash offers, but are getting the cash from another flip they’re selling. If that home doesn’t close, yours won’t either.
- Avoid “wholesalers” – investors who don’t actually buy homes themselves. They get a home into escrow, then look for a buyer who’ll pay them to take their place. These guys went to one too many get-rich-quick seminars.
- Avoid “grinders” – investors who purposely bid high to get a house and “tie it up”, then try to get the seller to reduce the price during escrow.
- Avoid “flakes” – investors who rush to get a home into escrow, then decide the “deal” isn’t for them and cancel.
I know a lot of fix-and-flip investors. And many (most?) are honest, hard-working businesspeople who buy ugly homes and make them beautiful. But the bad apples give the rest a bad name.
