As a HomeVestors franchisee and President of the Tidewater Real Estate Investor’s Group in Hampton Roads, VA, I witness lots of people try to break into the real estate investing arena. These are the top 10 mistakes I see new investors make when trying to wholesale a house to a landlord or rehabber. In future blogs, I’ll expand on each of these mistakes, so stay tuned!
1) Paying too much for the house in the first place
2) Using tax assessment, Zillow, or an old appraisal as the value
3) Inflating the ARV when marketing to your investors
4) Deflating the repair estimate when marketing to investors
5) Not getting termite/moisture inspections
6) Under estimating what it will cost in real estate agent commissions, buyer’s closing cost assistance, and repairs to get it sold
7) Buying houses with White Elephants
8) Not knowing who the real cash buyers are
9) Putting houses under contract without options when they don’t have the financial ability to close
10) Not putting a property they have under contract in MLS if they don’t get it sold the first two weeks.
Patti Robertson HomeVestors Franchisee & Development Agent
HomeVestors Franchisee & Development Agent
Licensed Agent With CoastalVA Realty, Inc.
patti.robertson@homevestors.com
November 14, 2010
uglyhousegal
2 responses to “10 Mistakes New Real Estate Wholesalers Make”
dianadynamics
November 14th, 2010 at 19:41
Im interested in knowing your opinion of Zillow. I have used the site before and wasn’t sure about the accuracy of the “Zestimates” they give. They usually seem to be higher than market prices, do you agree?
uglyhousegal
November 15th, 2010 at 02:35
In my opinion, the only thing consistent about Zillow and Trulia values is that they are inconsistant. For an REO ,or an as-is comparison, they do tend to be high. For a property that has had a $40K-$50K renovation, I find them to be low. The biggest problem in our area is that our tax records don’t record neighborhood, so they are pulling based on proximity and similarity. Neighborhood to neighborhood, values can be vastly different.
It does seem that the values are getting closer to reality though, compared to several years ago. I believe they are improving their evaluation criteria.