Hi, my name is Darren Brown. I’m the owner of Darren Buys Homes Cash. We’re a local based cash buyer company right here in Sacramento. We’ve been buying homes for over the last 30 years. And today what I wanted to talk to you about is how to decide by the numbers if selling a home to an investor for cash is worth your while. I mean, really, is it the best option for you?
So take into consideration that this particular scenario that we’re going to be going over today is not for homes that are being sold that are already remodeled and ready to go into market. Your best option there is probably just to get with a realtor or Opendoor or something like that. But if your house needs remodeling, it’s outdated, or it’s got tenants, or you inherited it, it was a probate, this probably fits in for you.
So probably two of the most important factors that you’re going to be taking into consideration if you want to sell your home cash to an investor like myself are going to be time and money. Do you have the time? It’s going to take you several months to get it up to the speed, to get the tenants out, and to get it on the market, and to get it sold. Do you have money for remodeling, if it takes that? I’m pretty sure most homes, if they haven’t been remodeled in the last 15 years, if you want to sell it for top dollar, that’s what it’s going to take. It’s going to have to be remodeled.
So let’s take a look at some of the numbers here, and you can use these numbers to fit your own scenario. What we did is just put some numbers on here on the board for you, give you an idea if it’s going to make sense to you.
So when we look at scenario number one, if you were going to put your home on the market, and you were just going to sell it with a realtor, and you actually had cash and you had time. In this case, we’re using a resale of, say, 350,000. You got a mortgage on it. It’s about 200,000. 200,000 mortgage, 50K for the remodel, 20 that you’re going to be paying your realtor in the title fees. You’re going to be paying about $10,000 for a buyer closing costs. There’s no real way to get around that. In today’s market, we know that this is a buyer’s market here in Sacramento, so that’s one of the things that you’re going to have to take into consideration. Also, the mortgage that you’re going to be paying over the next five to six months while it’s on the market, while it’s getting repaired, the mortgage and the bills that are going to be associated with that property that you’re trying to sell.
In this case we’re looking at, with these numbers, 295K out the door of your total investment. And if you’re selling for 350, your net in this case would be about 65,000 in about five to six months. Take into consideration, this does not talk about capital gains on this 65. You’re going to be paying that too. And if it takes time to get the tenants out, if it’s occupied or whatever, getting them evicted or having them get out and you have no income coming in, you’re going to have to take that into consideration.
Second scenario is zero cash. You don’t have any money to remodel. You need to sell, and you have time. Same mortgage, 200,000. You’re not putting anything down. It’s as-is. You’re still going to be paying, if it’s going on the market, 20,000 in commissions, title, still going to be paying about 10,000 estimated for buyer’s closing costs, and you’re still going to be paying that mortgage and the bills associated with that property.
In this particular case, you’re out the door at 245, and you’re not going to sell it at 350, because you haven’t done anything to it. It’s not going to be at full market value. You’d probably be selling it somewhere around 285. In this scenario, that’s what I’ve plugged in. You can plug in your own numbers. In this scenario, you’ll make about 40 grand net in about five to six months, compared to 65 if you fixed it up.
The last scenario that we’re talking about is selling to an investor straight out. You don’t have time. You don’t have the money. You want it done. You don’t care about the tenants. Usually the investors such as myself, I buy homes cash, I take care of the tenants, so you don’t have to worry about that. You don’t have any money for remodeling. You’re not going to do that. You don’t pay any commissions or title to the investor. You don’t pay any buyer’s closing costs. There’s no mortgage going to be associated, no mortgage bills that’s going to be associated with this property, because you’re just going to sell it straight out. In this case, you owe 200, you sell it for 230, you make 30,000 in 10 days, versus the others with 40 and 65. This one will have minimal of capital gains, and you don’t have to worry about the tenants.
So that helps you out learning if you want to sell your home cash to a cash buyer like myself. Go to www.Darrenbuyshomescash.com is how you can reach us, or you can reach me at 916-300-7962, and we look forward to hearing from you. https://www.darrenbuyssacramentohomes.com/