Buyers Remorse What is this dreaded disease? Buyers remorse! All buyers experience the onset of the disease, once their offer is accepted by the seller. Even as a real estate investor, you will experience buyers remorse. There is no known antidote or medication. The disease just has to run its course.

The symptoms of buyers remorse usually strike at night, when a buyer is about to go to sleep. Sometimes the symptoms strike after the buyer has fallen asleep and they awaken as if from a nightmare.

The buyers start having doubts about the purchase. Are they doing the right thing? Should they look at more properties? Did they offer too much? Can they really afford the monthly payments? Is the house big enough? Is the house too big?

They start to sweat. They get out of bed and get a drink of water. They go back to bed, but they cant fall asleep. The questions begin swirling again in their heads. What if they dont qualify for a loan? What if they do qualify for a loan? Who is going to take care of the pool? What if the pool does leak?

In our case, three weeks after we had accepted the buyers offer, and three days after we had finished repainting, installing the gas line, and removing the tree, the buyers backed out. Their case of remorse became terminal for them and for us. Our deal was dead.

Bottom line: Provide allowances for the work to be done after closing, if you must, to make the deal work, but dont spend your time or money on it before closing. Oh yes, and our profit on this deal? Dont ask. You got the point, right?

Example 4

Buy the Foreclosure First The other problem with retail buyers is they usually do not pay cash for their real estate purchases. They have to qualify for and obtain a loan from a real estate lender. This means you will have to wait longer to get your money. Forty-five days is a fairly standard closing period from the time an offer is accepted to get a loan processed and funded.

In the case of a government-insured loan or a government-guaranteed loan such as FHA loans or VA loans, it may take anywhere from 45 to 75 days to fund the loan and close the escrow!

Then Get a Buyer Again, early on in our real estate investing career, we tied up a three-bedroom, one-and-a-half-bathroom condo that was in

pre-foreclosure. We bought it for nothing down and took over the sellers existing loan. We flipped the condo to a retail buyer who made an FHA offer to us for $89,000. This looked like a sure moneymaker for us because we only had $2,000 into the property for back payments on the loan.

The escrow was to close in 45 days or sooner.When it finally closed after 79 days, we had several unexpected surprises. The first surprise was that the deal actually closed. That was a nice surprise. The other surprises were not so nice.

We had almost three months of interest due on the old loan being paid off. We had almost three months of property taxes to pay. And we had almost three months of homeowner association dues to pay as well. These costs were really starting to add up.

The coup de grace was the four discount points we had to pay for the buyer on the $84,000 FHA government-insured loan. Each discount point was 1 percent of the loan amount.This amounted to $840! We had no idea this was going to be so expensive. Needless to say, we were not happy with what happened to our $10,000 potential profit.

Our Profit

Sales Price Purchase Price Back Payments Profit

$89,000 $77,000 $ 2,000 $10,000

Actual Profit

Potential Profit Loan Interest Property Taxes Homeowners Dues FHA Discount Points Actual Profit

$10,000 $ 1,540 $ 750 $ 353 $ 3,360 $ 3,997

Wholesale Buyers

We actually prefer flipping our foreclosure properties to wholesale buyers. Wholesale buyers do not get buyers remorse. (Well maybe a little bit.) We know some of you are thinking: Wait a minute. How can you

make any money flipping real estate to wholesale buyers? Dont wholesale buyers want to pay a wholesale price?

We do flip our foreclosure investments at a wholesale price to wholesale buyers! We are not greedy about it. We prefer to do many smaller deals and make a quick profit rather than one or two big deals that are very time-consuming and that entail more risk.

We have come to appreciate that being successful real estate investors is strictly a numbers game. Although we prefer to flip our foreclosures to other investors for all the reasons we just talked about, we are still smart people. Our marketplace is both retail and wholesale buyers. The more buyers you have in your potential pool, the more likely you will be able to flip your foreclosures successfully.

In the next chapter we will show you how to assign your foreclosure contracts.This speeds up the flipping time. Rather than you taking title to the property, you may never have to take title to the foreclosure property to make Quick Cash. The buyer you assign your contract to will receive title directly from the owner. Fasten your seat belts!