Home Buyers

Buyers’ FAQ

Q: What is Rochester Homes Wholesalers all about?

A: We find the best wholesale real estate property deals in Rochester New York — properties available at the lowest cost, that also give back to investors the highest return on their investment capital. Then we present them to investors who buy them, and then rehab, rent, or resell them at a profit.  Sometimes a considerable profit.

Usually we work with cash buyers and investors in the Rochester New York or New York State area, who are looking for deals that generate significant investment income in the shortest period of time.  But we welcome investors across the country, as well as Canadian, European and global property investors.

Q:  What is ‘wholesale real estate’ and what are ‘wholesalers’?

Wholesale real estate dealers bring together highly motivated sellers and cash buyers.

Why are some home sellers strongly motivated to sell?  All sorts of reasons. They may have gotten a job out of state and need to move quick.  They may have inherited a property and don’t want to manage it from a thousand miles away.  They may have overextended themselves financially and need ready cash.  Whatever the reason, they’re prepared to sell at a very low price in order to secure a fast sale.

Wholesalers seek out such motivated sellers.  Sometimes they buy property directly from the seller, sometimes they get property under contract.  They then arrange to sell to cash buyers at a price that’s still far under market value.

When you buy wholesale, everyone wins:

*  The original seller makes a quick sale on a property they no longer want.

*  The wholesaler resells at a profit that covers the time, research, marketing, negotiation, paperwork and everything else needed to find a great investment property, arrange the deal, and locate an interested buyer.

*  The cash buyer gets a property at what can be extraordinary bargain prices, without going through the hassle of searching it out, setting it up, or negotiating the deal with the original seller.   He or she simply buys it cash — at a massive discount.

Q: What about Realtors?

A: Realtors can benefit too. Many realtors largely concentrate on properties that are in comparatively good shape and that sell roughly near market value, whereas wholesalers often concentrate on properties that need extensive rehab and are far below market value. As a result, competition is rarely an issue.

Plus, we research many properties and not all fit our criteria, but would instead be better fits for a Realtor’s services. If that’s the case, we’ll direct the seller to Realtors instead.

There are a few myths about wholesaling in this regard that should be corrected. For one, wholesaling is entirely legal. Many people think that the only way to buy and sell property is through a realtor. That’s not the case. You need to get all the proper legal paperwork in place, but you can buy and sell property directly. (That’s what those “For Sale By Owner” signs are all about.) Another myth is that wholesalers, like Realtors, work on a commission basis. No. Wholesalers don’t take commissions.

Q: Are all your properties available at 50% off market value?

A: No. Some are 60%,70%, 80% off. Or more. Some are only 40%, 35% or 20% off.

Have a look at our Hot Properties page.  The properties listed there today (September 5, 2011) list at 24.9%, 42%, 50%, 52%, 53%, 57%, and 81% underestimated value.   The estimated value isn’t something we make up either:  they come from reputable unaffiliated sources like Zillow, Trulia, and Nothnagle — with links to their online data for each property.

But percentages don’t always tell the whole story.  60% off a house appraised at $10,000 means that if that house sells at the appraised price, the buyer makes a profit of $6000. If a house is bought at only 20% off the appraised price of $200,000, however, and and that house sells at the appraised price, the buyer makes a profit of $40,000.

It’s a solid return on investment in both cases; but as you can see, a smaller percentage can sometime result a bigger return.  It depends on each individual case.

What you can depend on is that in every case we work hard to make sure our investors make a large cash return on the deal.

Q: Aren’t these just bad houses in bad areas that no one could possibly want?

A:  Since we sell between 100 to 150 such properties a year, some people obviously want them. So the answer is “no.”  You may also want to check out the Zillow, Trulia, Realtor.com estimates and City of Rochester assessments of the properties we feature.  They’ll confirm that we offer properties worth buying.  If we didn’t, people wouldn’t be buying them from us in cash.  Which they do.

But we’re glad you raised the issue, so we can address some all-too-common misunderstandings about wholesaling.

First: we do not focus on “cheap homes” or “ugly houses” or “foreclosures” in “bad areas,” much less “war zones.”  Yes, some properties we acquire may need extensive rehab. Other properties we get may be in perfect condition. Some may require cosmetic repairs. Some may have tenants living and paying rent in them.  Some properties may be luxury homes or vacation homes.

Their condition is a consideration, but it isn’t our main consideration.  Our main consideration is whether a cash buyer can make a significant profit if he or she buys it from us.

For instance, if a house has an estimated value of $30,000, but it’s going to cost $40,000 to repair it and make it marketable, we won’t buy it, and we won’t sell it.  But if it has an estimated value of $100,000 and it’s going to cost $40,000 to fix it up, we may well buy it and sell it.  A contractor or rehabber could buy it at that price, fix it, and make $60,000 profit.  It’s a good deal.

The same goes for houses in “bad areas”.  We buy and sell wholesale property in the Rochester New York area.  That area includes the suburbs, nearby towns and villages, lake shore areas, places near colleges and universities, and property in the city.

Some properties in all those areas are great buys. Some aren’t. We look for the ones that are, regardless of the location.

Always our main concern is:  do the numbers work for you the potential investor?  Is it an irresistibly good investment for a cash buyer?  If it is, we’re interested.  Because we know our cash buyers will be.

On the whole we do prefer suburban Rochester New York properties.  Sometimes we have several available.  Sometimes we have only City properties available.  Sometimes we have both sorts and more.  But whatever property we have available all have one thing in common — strong solid certain profitability.

Q: How do you find such good deals?

A: Marketing marketing marketing. Active research. Direct mail. Referrals. Word of mouth. Networking. Social media. Reach the public and finding highly motivated sellers — and buyers — is work.

We do it well, and there are certainly good deals to be found. It’s just time-consuming, labor-intensive, and sometimes technically complicated, at least if you use internet-based or computer-based research tools, which we do.

Most investors aren’t interested in putting that kind of time and labor into an ongoing and intensive search effort. They have better things to do. We save them the time and the labor, find the best deals, look for places that fit their investment criteria, then present them exactly the sort of properties they want.

Q: How do you know what an investor wants?

A: We ask them.  They tell us. Are you interested in an investment property? You can send us a detailed description of exactly the kind of properties you want from any page on our web site. Just fill in the form and press Send. You can also reach us through our Contact page, or send an email to us atinfo@rochesterhomeswholesalers.com. Or call us directly at 585-739-6722.

Once you let us know what you’re looking for, we’ll keep an eye out for exactly those homes that fit your investment criteria, and we’ll contact you the moment it turns up.

For instance, say you’re looking for duplexes in the Merchants area and you don’t want to invest more than $30,000. Or say you’d like to find an already-tenanted four-unit property in the Irondequoit area. Tell us! We’ll search for exactly those kinds of properties.

When we find them, we’ll tell you — and we’ll tell you first. If you change your mind, or if we get a property we know someone will pick up whether they asked for it directly or not, then we’ll list it publicly on our site.

(What if two investors tell us they want the exact same kinds of property? Then when we find it we notify both by email at the same time.  The first one that responds, gets it.)

Tell us what you want and we’ll find it for you. That’s what we do.  No work on your part. No obligation on your part either.

Q: What kinds of investors do you work with?

A: All kinds.  See our Investors page to learn more.  We work with:

* Professional real estate investors.

* Contractors looking for fixer-uppers.

* Doctors, dentists, attorneys and other professionals looking for an investment alternative to roller-coaster stocks, uncertain funds, low-yield T-bills.

* People who want to invest their IRA in real estate (yes, you can do that).

* European or global investors who find America generates far better investment returns than property investments elsewhere.

* Even home buyers who want good low-price homes to live in and no mortgage payments.

* Anyone who wants a fast high-yield profit.

Q: Why can’t I just find these properties myself?

A:  In some cases you can — if you’re willing to put in the time and the effort and have the negotiating skills, and are lucky enough to be in the right place at the right time.

But you won’t be able to find our properties.  We’ve either already bought them ourselves, or have them under contract.  Our homes generally don’t appear on the MLS or other listings (unless we put them there).  They’re not available anywhere else, except through us.

Which is why it’s such a a darned good reason to contact us and sign up to get our latest property updates the moment they come in.

Q: What if I don’t have enough money to pay 100% cash?

A: We may be willing to co-invest with you. Or help you find a partner. Or direct you to hard  money lenders. Or find a property that requires less cash up front.

Don’t assume that if you’re somewhat short on cash, a deal can’t be arranged.  Sometimes it can’t.  But sometimes it can.  Get in touch and we’ll see.

It’s also possible that you could make enough money to invest by referring properties to us.  If you hear of someone wanting to sell a property quickly at a steep discount and let us know, we’ll pay you $1000 for the referral if we buy and sell the property.  Enough such referrals and you could end up with enough to invest in short order!

Q: Your Hot Properties page talks about ‘estimated values’ and ‘light’ or ‘extensive’ rehab.  Who works out those estimates?   Why should we think they’re reliable?

Good question.

We don’t estimate exact rehab costs on our site because exactly how much rehab a buyer wants to put into a house can vary considerably.  Some want to put in just enough to make it rent-ready, others want to bring the house up to its best so as to attract higher-paying tenants and get higher rents.

We also don’t do it because we ourselves are involved in selling the property. Estimating rehab costs can be a little subjective, and we don’t want it to appear that we’re under-estimating the amount needed, even mistakenly.

We do try to let the buyer know whether heavy or light rehab is needed.  But that obviously isn’t a precise estimate.  We don’t put such estimates on our site.  Clearly, if there’s been fire damage, or the roof’s caved in, it’s pretty safe to say that the house will need a great deal of rehab work.  That’s our impression, and we say so.  On the other hand, if everything looks to be in good shape, we’ve found that it often is.

But those are just our personal opinions, given to help share with an interested investor a general impression of the property.  That’s all we claim for it.  We certainly don’t advise any buyer to buy based on just that.  Every serious buyer ofany property should always check out the property’s condition for himself, if not use a professional appraiser — on every deal, whether we’re involved or not.

As far as estimated property values go,  as opposed to rehab costs, we try to give people a sense of a property’s fair market value by going to independent, objective, unaffiliated third party assessors such as Zillow, Trulia, or the city’s assessment rolls.  Precisely how each one reaches their opinions of the property differs in each case.

But we want to make it clear that we are not saying that the property is worth such-and-such an amount — independent assessors are saying it.  We give you their assessment, and link to them and their information.  You can investigate and  judge their reliability for yourself.

Q: Could you tell us more about your company and the people in it?

A: Rochester Homes Wholesaler is a real estate wholesaling company that specializes in finding and passing on great Rochester New York wholesale properties to investors.  Daniel Theodore Howard, its President, founded the firm in the wake of the general economic downturn of 2007-2008, after a long and distinguished record of achievement in automotive sales.

Howard, a member of FFREIA, Rochester New York’s Freedom First Real Estate Investment Association, saw that the new financial situation meant that real estate properties would now be available at historically bargain prices, and built a firm and system that would take full advantage of this once-in-a-lifetime opportunity for buyers and investors.

Howard works with David Pascal on the marketing, and he has active contacts with an extended team of associates including real estate attorneys, contractors, rehabbers, realtors, property managers and other real estate professionals and investors.