Home investors are like an answered prayer for homeowners looking for an alternative to the traditional selling process. They allow you to sell your house for cash quickly and hassle-free.
But before you find an investor, there are some things you should know. For example, who are they exactly, the pros and cons, and whether or not working with a home investor is right for you.
Who are Home Investors?
In contrast to traditional buyers who purchase homes solely to live in, home investors are investors who buy homes for business or investment purposes. The name says it all, right? Though, there is a little bit more to their title.
Home investors are also individuals or large firms who buy one or two properties or acquire them in bulk. And investors that buy houses do so for a variety of reasons.
One of the most common, especially for individual investors, is to generate a source of passive income through rent payments. Similarly, larger firms, like REITs, also do this, especially when they buy in bulk. This strategy is often referred to as a buy-and-hold investment.
Yet, some investors don’t hold on to their purchased properties for too long. Instead, many earn their profit by selling homes to investors or buyers at a much higher price. These companies usually employ a reverse strategy: they already have an extensive list of eager buyers, therefore they scout for properties off-market to purchase specifically for them.
Other home investors increase the property’s profitability with a “house flipping” strategy. This tactic involves buying a home for a lower price, renovating it, then selling it for a higher cost — one that reflects its new value. The difference in the initial buying and selling price (minus the renovation expenses) represents the profit they make.
Lastly, some home investors also combine holding and flipping in a sort of hybrid strategy. They would usually buy a property, renovate it, then hold it to charge a higher rental income.
Reasons to Sell Your Home to an Investor
Because home investors are always on the lookout for new properties, they are much more motivated buyers than a typical buyer. Not to mention, there are also situations when a homeowner is just as eager to sell as the investor is eager to buy.
For instance, you want to sell your house fast and hassle-free. This is usually the case when you’ve fallen out of love with your house and want to move on. Selling quickly to an investor is the most efficient way to do so.
Another case would be inheriting a property that you have no interest in keeping. A quick transaction relieves the new homeowner of most taxes or liabilities. Also, if you’re a real estate reseller trying to dispose of a house on escrow, finding a buyer quickly is vital. Home investors can satisfy this need nicely as well.
Selling to an investor may also be a better option if you want greater control over the turnover date. Buyers who plan to live in the house will usually have strict move-in dates. This timeline may not always be in-line with yours. Whereas, investors, because they’re not moving in, could have little concern over move-in or move-out dates.
Another reason to sell to investors, you lack the financing needed to renovate your home. Consider selling to a home investor, if you cannot afford to make the necessary repairs that will appeal to buyers.
Lastly, selling to an investor is attractive for owners who simply want to avoid the hassles of selling a house themselves.
With that said, depending on your situation, selling houses to investors could be a wise decision.
Advantages of Selling Your House to an Investor
Selling a home to an investor has its perks. Here are a few of the advantages:
No need to prepare your home
Most home investors see beyond the walls of your home. They tend to care more about the potential of the property rather than the appearance. Hence why they often buy houses “as is.”
Meaning, you don’t need to go through the tedious and financially draining step of renovating your home for buyers. In fact, home investors are happier with houses in distress because they have the ability to customize the house as they see fit.
By eliminating prep work you also drastically reduce the time it takes to sell your home. If you need to start selling within the month, then you certainly can.
Transactions with investors are significantly faster than selling to another homeowner, even if there is a real estate agent by your side. Apart from not having to prep your house as listed above, you also don’t need to worry about open houses or negotiating with dozens of buyers.
Plus, investors require lesser time in escrow, unlike a home buyer’s usual request of 45 days. That’s because investors don’t need the time to appraise a house, have a loan approved, or sort out a mortgage. They can and usually skip to the closing process, ready to pay out in cash.
As a matter of fact, transactions with investors take as little as two weeks, compared to the standard 60-day minimum of the traditional home buyer.
Enter into flexible arrangements
Home investors are great if you can’t afford to maintain your house, but still want to live in it. A home investor can buy your home and rent it back to you, or they might even agree to take care of your mortgage.
Avoid the issue of the buyer not having enough cash
When a homeowner wants to buy your house with a loan or mortgage, there’s a risk that they won’t be approved, even if they were already pre-approved by the bank. Lenders can simply decide against the buyer’s creditworthiness, forcing you to start back at square one.
While not as big of a problem for you, it is still a massive waste of time. You can also miss out on buyers who actually have the means to buy your property.
Potential Drawbacks of Selling to Investors
If you’ve read this far and are planning to Google, “home investors near me,” pause for a moment. You still need to know there can be a few potential drawbacks to selling your house to an investor.
You won’t know who’s buying your property
Some homeowners are emotionally attached to their house and prefer to pass it on to someone who they will trust to take care of it. Unfortunately, if you sell to an investor, you won’t always know who it is. Neither will you know their intentions for buying.
Potential for scams
Unlike realtors and real estate agents who need to be trained and licensed, anyone can be a home investor. Credentials or certificates are not legally required. At best, you’ll work with someone who lacks the knowledge or experience to help you. In this case, you’re much better off selling the property yourself! At worst, home investors can even be potential scammers waiting to cheat you out of your money.
So how do you find an investor to buy a house without attracting scams? The best way is to search for reputable companies with a good track record. Check their website, call their contact number, and read their online reviews.
Yes, there are potential drawbacks. However, those are directly associated with dishonest and greedy home investors. Remember, there are plenty of honest and reputable real estate investors out there too!
Consider 365 Property Buyers
If you’re looking for investors to buy your home, you’ve already found one: 365 Property Buyers.
We are a technology-driven, innovative real estate investment company who is willing to buy your home directly, at a competitive price. In the end, we buy houses for cash based on a fair cash offer for homeowners who are looking to sell their house fast and hassle-free
What to expect? A quick transaction and a fair cash offer in as little as 10 minutes. Once we review your offer in-person and you accept our offer, you’ll get paid in cash within days.