Homeowners always want to know how come the offer they receive from an Investor is so low. When an Investor makes an offer an a house they typically pay for a majority of all the costs to close. That means at the time of purchase the Investor pay for title insurance, survey, any back taxes, any amount needed to bring the mortgage current, etc.
After the purchase the Investor funds the amount needed to rehab the house which could include fixing the foundation, fixing major systems such as A/C or HVAC, roof, etc.
Once the house is fully rehabbed the Investor must put the house on the market to sell. That cost to sell through a Real Estate Agent is typically 6% of the sale price. Add on another 4% for closing costs, additional overages (always unforeseen), projected profit and it’s evident why an Investor must offer such a low amount. What do you think?