Lack of home inventory leads to increase in wholesale real estate signs in Tampa Bay

Quick sales offer fewer hassles but lower prices
Posted at 7:14 PM, Jun 23, 2016
and last updated 2016-06-23 19:31:07-04

We see them in medians and at intersections all over town...thousands of small signs with phone numbers offering to buy or sell homes.

But are they a good deal for sellers or new investors?

An expert we talked to said it depends on multiple factors.

“They’re called bandit signs,” said Hernando County real estate investor Paul Cutting.

"One reason you see so many of those is because they work.”

Some promise to sell your house fast, in as little as one day.

“They're looking for distressed property, a motivated seller,” Cutting said.

Sellers can get quick cash from a wide variety of local investors, as dozens of videos on YouTube indicate.  

“We buy houses all over Tampa and we can close in three days,” says one spokesperson.

“We are serious, professional investors,” said another.

“Do you have a house or rental property you'd like to sell fast for cash?” asks a third Tampa-based cash buyer. “We buy houses regardless of condition, price or location.”

But we found buyers pay far less than retail value, and houses with big mortgages usually aren't even considered.

We contacted more than half-a-dozen people who put up signs, but none wanted to do an on camera interview.

“They're looking for people that are motivated and are willing to take a loss. Because if there's not a certain amount of profit in it, they're not gonna buy your house, regardless of what the sign says. “

Cutting says those quick sales could benefit some homeowners who don’t want the expense and hassle of a traditional sale.

Many involve sales of properties inherited by out-of-state heirs, or homes that require extensive repairs the current owners don’t want to make.

Cutting buys wholesale homes, renovates them and sells to retail customers.

By the time he gets them, many have already been bought and sold multiple times by other investors and large investment groups, who often buy packages of multiple properties from banks.

Cutting says low housing inventory is behind the recent onslaught of signs.

More people are also trying to get into wholesale real estate,  thanks to the popularity of home flipping on t-v shows and investor seminars. 

But while many try to get into the game, few are successful.

“They're gonna try to pitch it as a get rich quick kind of thing. It's far from it. It takes a ton, a ton, a ton of work,” said Ruben Ponce, an investor who says he regrets spending $2,000 to attend a real estate seminar only to learn that the company offering the class wanted a $30,000 fee to share all the secrets of their real estate buying program.

The I-Team  signed up for investor websites and discovered that unless you are a handyman with lots of cash, buying wholesale properties may not be the easiest or cheapest path to home ownership.

The current asking price for a Seffner home we found on the site was $60,000.

The investor's website says it needs about $10,000 worth of work, then would be worth $85,000, a $15,000 profit.

But the house has broken windows, mold, a leaking roof and no air conditioning system.

It sold in April for $43,000, and no work has been done on it since the price was raised by $17,000 by the last investor.

Many of the homes on the investor websites would be considered “tear-downs” by most contractors and won’t qualify for mortgages or insurance coverage in their current states.

So they are only available to those who come to the closing with cash.

But Cutting, who sales properties he renovates himself on his own website, says if you have the cash and the price is right, there is still money to be made in real estate, as long as you do your homework. 

“If you're going through a title company, and you're getting a warranty deed, and you're gonna do a title search, and you're going to do a home inspection..If you do those three things, you should be fine,” he said.

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