Bulk Package Deals – Are They Worth It? | Real Estate Investing
Yo yo, welcome back to the science of flipping podcast. I am your host, Justin Colby. And today’s episode is going to be about bulk packages. I’m seeing them everywhere as a buyer, and I’m sure you are coming across them, let’s talk about them and why they could be a great deal. But maybe not so great after all. Right. As always, our number one and main sponsor MinutePages.com Are your websites you need as a real estate investor. If you are a real estate investor or an aspiring real estate investor for just $97, you can get the most professional best looking real estate investor websites, there is automatic SEO going to help you gravitate to the top of Google, it is a no brainer. So you can build credibility, influence and authority when talking to realtors, homeowners, contractors, title companies, hard money lenders, go to MinutePages.com and get your website right now.
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All right, so let’s jump into this idea about bulk purchases. I myself am looking to buy as many rentals as possible. And so either my students are presenting them to me or realtors are presenting to me or I’m just coming across them through my ordinary marketing. Now, while the concept seems great as I can go out and buy, you know, 20 homes at one time, in fact, I’ve been structuring some creative financing negotiations on two of these packages. Neither two have yet finalized. But the reality here is this, at least what I am finding, a lot of these bulk packages are coming because the owners of said properties realized they missed the top of the market. Now they’re ready to liquidate. They’re not actually ready, they’re not actually motivated. What they’re doing is they have FOMO Yes, fear of missing out. So now they’re scrambling, because they know they’re about to go through a cycle where interest rates are higher, it’s not as easy to find a buyer, and they’re trying their best to sell at top dollar. Now, if you heard what I just said, they’re trying their best to sell at top dollar. That doesn’t make any sense for us real estate investors, because you can just go on to the MLS and buy any property for top dollar. So in bulk packages come around, you would think of the brand like Costco, you buy in bulk because you receive a discount. That’s the concept here. But homeowners in their investors, let’s call it what they are these investors that own 15, 20, 50 doors that they’re trying to sell at one time and liquidate they’re not realizing the concept. If you’ve heard me on other videos in other episodes and by the way, let me pause now. If you are not watching this on my YouTube page, you need to go over there youtube.com//JustinColby and subscribe. And by the way, if you’re listening to this on iTunes, or Spotify, make sure you’re giving me a five star review.
Now again, these investors are selling for top dollar. The challenge we have seen is even in the single family home one home owner and these investors trying to sell at bulk as they have not yet caught on to the market shift. Now could these investors sell one by one on the MLS market maybe. Now that’s always at least the handful of bulk packages I’m trying to acquire and or have come across my desk that’s at least my experience is US investors. They’re not ready to take a discount. In fact I had one just a little while ago just before this last interest rate hike and quite honestly it was a great deal I was even trying to get it done with seller financing because the existing loan was at 5% interest on all 12 of these properties. The challenge being is the homeowner wanted top dollar would not take a discount and if if anything wanted more money, if he was going to do seller financing, which in theory is fine. I have no problem buying a rental in a creative way and paying top dollar for it. But when it doesn’t make any money and you can see for the next several years because the rent is actually underperforming at my buy price not at his buyer price at my buy price I potentially in that deal was going to come out a couple $100 every single month, very close to about $1,000 a month. So then I just started doing some very simple math and even on creative financing because of my bride price. I couldn’t make the math work. So what that investor I actually just followed up with that investor because that’s the secret of success is the follow up nurture game, that investor actually just informed me they’ve been liquidating one by one at their top dollar on the MLS. As the tenants leases go up, well, awesome, that is great. I told him, I’m happy for you, that is fine, I’m not upset at all. Just also understand, if you’re gonna try to liquidate in bulk, I need some love, I’m happy to buy them all, the transaction will be smooth, it will be fast, or a buyer usually would. But we need a little bit of love.
Again, think Costco when thinking like this. So if you’re out there, coming across investors that have bulk packages, bulk packages are being sent to you. You have to do your due diligence, if you’re going to be buying it, you if you’re going to present them to me, you need to give me more than just here’s a package at 20 deals for $3 million, whatever. Like I need more than that if you’re going to try to present him to me. And quite honestly, I’m only buying those type of deals or going through my students to buy those deals. So if you’re not a student, no harm, no foul, but I probably won’t be your bulk package guy. If you’re interested in being one of my students. Just let me know somewhere on social media. TheJustinColby is my instagram handle. You can comment in the comments below and YouTube can’t do a whole lot on iTunes. But that’s okay. You can find me anywhere. TheJustinColby is a great place. So with all that said, Guys, we are in this time of the market, homeowners and investors alike are still trying to get top dollar they’re not always the most reasonable when it comes to pricing their homes. And I can understand it and I respect it. But at some point there will have to be because interest rates I believe will even rise again. So hopefully you found this valuable hopefully it gives you a little insight of what I’m experiencing and my buy and hold model what’s going on in the market what’s going on with investors and let me know how else I can help again my instagram handle TheJustinColby. Go over there. Let me know happy to chat with you. Talk to you soon. Peace
