How to find companies that buy houses in your local area

HOW TO FIND COMPANIES THAT BUY HOUSES IN YOUR LOCAL AREA

This 4 step guide will help you find companies that buy houses locally. If you are just beginning your search to find a legitimate home buying company, then you are without a doubt feeling a little overwhelmed right now.

Just driving down the road you will find plenty of hand-scribbled “cash for houses” signs and at least one billboard screaming “We Buy Ugly Houses”.

Even in the comfort of your own home when you search Google, you will get over one million results for companies that buy houses. How can you possibly narrow down this list and find a reputable local company?

Well, it’s actually quite easy.

Here are the 4 steps you need to follow if you want to find the best companies that buy houses in your area.

Step 1 – KNOW the 4 different groups of investors buying property

Obviously, investors buy houses for different reasons. Some are looking for a short term profit while other investors are looking for a long term passive returns. Let’s break down the four groups of investors.

  • WHOLESALERS
  • FLIPPERS
  • HEDGE FUNDS
  • INDIVIDUALS WITH RETIREMENT ACCOUNTS

The WHOLESALER

Have you seen the postcards, signs, and billboards with the phrases “we buy houses” or “I buy houses”?  If so, chances are you are dealing with a WHOLESALER.

WHOLESALERS are the most aggressive real estate investors. They only make money if they get houses under contract so they can resell the contract to another investor for a higher price.

It is highly likely that your WHOLESALER has just paid some Guru several thousands of dollars.  They are very eager because they think they just learned “How to make millions in real estate with no money!”

These WHOLESALE investors are looking for a short term quick profit.

The FLIPPER

It is amazing how many new investors are trying to renovate homes for a profit now. This has been spurred by the explosion of over-optimistic shows on TV. HGTV makes it look easy to make money renovating outdated houses.

They quickly find out it is quite difficult to successfully flip a house.  It is even harder to make a decent profit worthy of all the time and headaches.

In fact, there are very few investors who can successfully flip a house as a part time job.  This is why most of these part-time investors only flip one house before calling it quits. However, there are several successful full-time FLIPPERS who do an excellent job.

These FLIPPERS are looking for a short term profit.

The mythical HEDGE FUND

The headlines are filled with how massive HEDGE FUNDS are making millions of dollars investing in real estate.  Anyone invested in these funds are seeing double digit returns on their money.

However, have you ever heard your neighbor say they sold their property to a hedge fund?

Probably not.

The reason is these HEDGE FUNDS are more interested in multi-family projects or purchasing homes in bulk from a bank. They rarely will buy a single family home and if they do, they will buy them in large numbers from the MLS.  Usually they will choose a local Realtor to represent them in these situations.

These HEDGE FUNDS spent millions of dollars in real estate recently at the tail end of the Real Estate Crash of 2008.

These HEDGE FUND investors are looking for a long term passive income.

INDIVIDUALS with self-directed retirement accounts

There are several INDIVIDUALS who have contributed and saved up a good amount of money in their retirement accounts. Typically, this money is invested in the stock market which has its ups and downs, but in the long run typically only returns very little profit.

As a result, several of these INDIVIDUALS are looking for bigger returns.  They have invested their retirement money directly in real estate using self-directed IRA’s.

These INDIVIDUAL investors are typically looking for a long term passive income, however it is possible for them to fund short term flips as well.

Step 2 – UNDERSTAND how these four groups of investors work together

Now that we have unveiled the four kinds of investors you will likely interact with, it will help you to understand how they work together.

The WHOLESALERS are the ones knocking on doors and mailing postcards day after day.  Therefore it is obvious that over time they will be the ones who will find the most potential projects.

Typically the FLIPPERS and INDIVIDUALS with retirement accounts rely on WHOLESALERS to find projects.  This is because they do not have the time to market directly to sellers.

It is possible a good project is listed with a local Realtor, but after paying high commissions and fees, these projects usually are not as attractive to FLIPPERS.

However, sometimes WHOLESALERS lack contracts to “assign” to other investors.  When this happens FLIPPERS, INDIVIDUALS , and HEDGE FUNDS will buy directly from the MLS.

Step 3 – PICK 1 of the four companies you want to work with

WHOLESALER are the easiest to find, quickest to act, and most flexible, but will typically offer you around 50-60% of the value of your home.

FLIPPERS can be easy to find, but will require a little more work. You can typically get offers between 60-75% of the value of your home.

INDIVIDUALS with retirement accounts will be very difficult to find.  But if you house only needs minor repairs you can typically get 75-85% of the value of your home.

Finding a HEDGE FUND buying in your area will be extremely difficult.  However, if you are successful, you can get close to 80-90% of the value of your home.

Step 4 – How to FIND them

If you are short on time, then a simple search in Google will quickly give you the results of several hungry WHOLESALERS.

Go ahead, type into the Google search bar “Investors that buy houses in (your city)”.

Beware, although these are the easiest investors to get in touch with, you can expect to receive the lowest price from them.

If you have a little time when choosing a company to buy your home, then finding a FLIPPER might actually be one of your best choices.  Although, you might find one like us on the internet, you will probably have better luck just driving through your neighborhood.

Find a house undergoing renovation.  You can identify one because it will have a dumpster in driveway, city permit taped to window, or several work trucks in front.  Then just pull over and ask someone to speak to the owner.

After verifying that he is in fact flipping the property, let him know you are interested in selling your home directly to an investor. Chances are he would love to make an offer on your house knowing he doesn’t have to pay a WHOLESALER assignment fee.

Finding someone that has a self-directed IRA is a little more difficult, however with this tip you can easily find one.

First, find a local company that offers INDIVIDUALS self-directed IRA accounts and give them a call. Ask them when the next time they are having a meetup or class to teach about their IRA products. When you show up to this meeting, you should be surrounded by several INDIVIDUALS who are actually looking to invest! These INDIVIDUAL investors will be less savvy writing contracts, so have a title company help draft it for you.

In order to get the highest offer for your property, your best bet will be to track down a Realtor representing a Hedge Fund. Just look at the local listings around your neighborhood and call all the listing agents. Ask them politely if they happen to represent any HEDGE FUNDS that are currently purchasing property.

Most of the time you will probably get an offer to list your home instead of the answer you were looking for. Don’t be afraid to tell the agent that you are not looking to list your house at this time.

Companies that buy houses in Austin, TX

If you happen to be selling your house in Austin (or close by), then Tally Two would love to make you an offer. We are not like other companies that buy houses, we have already done the hard work for you.

We have combined three of the investment groups mentioned in this article to form our own mini fund to purchase homes.

Tally Two is experienced in flipping homes, buying rentals, and building houses on lots.  We have even wholesaled homes to other investors.

We will openly admit to you what we plan to do with your property.

More than once we have advised homeowners, based on their circumstances, that it would be better to list their property with a Realtor.  We even told them the best agent to use depending on their location.

Give us a call at 512-763-0883 or fill out a form on our website and we will call you back.



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