buying rental homes in sacramento
Out-of-area buyers seeking investor-friendly agents is sort of a code for newbie wannabe investors hoping to grab a commission-oriented Sacramento Realtor with nothing but time on her hands to help them steal homes. My team and I receive a ton of emails every month from so-called investors hoping to find “investor-friendly agents” to use as robo agents. It’s not as bad as it was during the downturn prior to 2011, but those guys are still out there.
It’s confusing for some agents because agents are wired to want to help. Plus, some newer agents are green enough behind the ears to believe that this is their lucky day. It’s their lucky day because gosh, an investor with a lot of money wants to buy a lot of homes in Sacramento, and that investor has chosen this particular Realtor to
torment, er, I mean write a bunch of worthless offers.
What should an agent do when faced with a guy who wants to work investor-friendly agents? You check out these guys and their LLC. What is their track record? How many homes have they purchased in Sacramento? Are they cash or are they hard-money investors? Are they willing to make reasonable offers? In other words, do they pass the investor test? Real investors invest.
Investor-Friendly Agents Ask: What is a Cash Investor?
Let’s start by talking about cash. Cash means the money is the bank in liquid form, available for immediate withdrawal or wire. It does not mean the investor is planning to refinance his home to pull out equity. That is not cash. It does not mean that the investor needs to dump assets such as selling stocks or mutual funds or loading gold bars into the trunk of his 1997 Taurus, headed for the pawn shop. It most certainly does not mean the investor is applying for a hard-money loan. Even if the transaction is not contingent on obtaining loan approval nor an appraisal, if the investor is using a hard-money loan, it is not the “same as cash.”
Don’t get fooled by the guy flashing gold chains inside his suit jacket.
A hard-money investor is a person obtaining a loan that will be secured to the property. The lender will do due diligence and can prepare a preapproval letter. If an agent presents an offer as cash to a seller when the offer is clearly hard-money, that could be considered misrepresentation. Consider this approach: it is honest and intensely clear to submit an offer as hard-money reserving the right to substitute cash, over the other way around.
An investor-friendly agent is an agent who hopes to get paid. Because agents work on commission, there is no payment if the same type of offer is rejected 50 million times. When you look at our present seller’s market in Sacramento of limited inventory, only a robo agent with mush for brains would write offers that have no chance in hell of acceptance. What kind of offers are those? Those would be offers substantially less than market value, and lowball offers on newer listings. It’s basically the well known practice of throwing crap at the wall and hoping something will stick.
Investors need to conform to the marketplace to buy homes in Sacramento. If you are serious about buying an investment property in Sacramento, about buying homes that will cash flow, without playing shenanigans like inserting escalation clauses without merit (seriously?), we’re your committed Realtors. Otherwise, go make somebody else’s life miserable. Because there are plenty of those agents to
torture, er, hire.