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Read the special report on package deals and contacted a probate attorney. The attorney asked me what percentage of market value would end buyers that I connected with be willing to pay for a portfolio of single family houses (fair market value or appraised value………..was a figure of 60% to 70% a good idea?
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To give our resident experts on CFD a better shot at giving you a useful reply, it might be helpful if you could describe a little more about that “portfolio of houses.”1. How many houses are being discussed?
2. Other than the apparent fact that control of them is at some single point, what can you tell us about that control point (whether a judge, an attorney, a bank with REOs, an independent private individual or an investment entity, etc,?
3. Are they all in some stage partway through the probate process, or just some of them, or perhaps none of them? (Just because you were speaking with a probate attorney doesn’t mean that issue is nailed down.)
4. Is there anything else these houses have in common? Are they all occupied, just some of them occupied, or none of them occupied?
5. Are they are in roughly the same geographical area, or scattered widely? What’s the radius that would include all of them?
6. Can you estimate the average, high, and low market values of that collection?
7. What can you tell us about the economic desirability of that geographical area?
8. Are there mortgages on all, some, or none of them?
9. What are the apparent circumstances of their disposal? Is there a deadline of some kind on acquiring the lot of them? Or can they be optioned and HBS’d off one at a time as you can manage? (If HBSing is possible, do you have any experience yet with that process, or would you need help?) Or is there a short fuse on the lot of them such that you’d have to raise capital, or at least some transactional funding, to do a deal?
Don’t be surprised if your responses on these preliminary questions might even inspire a few more questions.
Good luck in putting together a complete understanding of this collection.
–Dee
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The answer to what percentage you can pay is — it depends!
If the properties are in very good condition and the seller is willing to offer some seller financing, you can pay close to retail prices
If they properties are in poor condition and require cash to buy, then the % will be much less.
It also depends on where they are located – kind of neighborhood, kind of tenants (hopefully not section8), condition of the properties, if there are any mortgages on the properties.
There are a lot of factors to evaluate so it is impossible to offer one answer which would apply for any scenario.
Also, a probate attorney is not the best way to find package deals. 99.9% of their clients have one house only.
And most people don’t know this, but many estates are settled outside of probate! Probate is only a very very small fraction of the real estate market. An estate can be settled with an heirship affidavit (with or without a will) which does not require a probate attorney at all.
To find package deals:
contact property managers
hire someone on upwork to write a script for your county assessors records to determine who owns multiple properties
code violations often lead to landlords with multiple properties in poor condition. market to code violations often to uncover landlords who have a lot of properties to liquidate.
Found a package of houses through a property manager……….there are 16 houses total…….going to peruse the package and make an offer but would like some input……….also found small mobile home which includes a three bedroom house on the site which I want to make an offer on………thanks for any input on both of these oppurtunites
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