Last week I had to pull out of 3 properties that I had under contract. I knew going into these that they were marginal in nature, I was expecting to make a 2K spread on each one. The reason that they were so marginal was that the owners owed too much to the bank on each house. All three properties had the same owner and were in Foreclosure, however the lender wouldn’t consider a short-sale. The properties were owned by a husband and wife…soon to be ex-husband and ex-wife and the bank felt that the husband’s income at his 9-5 was too high to qualify them for a short-sale. This divorce/foreclosure situation is A LOT more messy than I’m explaining, so I’m just giving the core details.

So I felt like I’d take a stab and them and see if I could move them. I had some interest from the cash-buyer roster that I have in Champaign. But not quite the same response that I had with earlier properties. In the end, after about 6 weeks I pulled the plug, with no contracts assigned. This cancellation was after one contract extension already. I felt it was best to cut my losses (marketing dollars, effort, time, etc.) and focus on other deals. Sadly, they’ll probably get foreclosed on, the bank will buy the property back at auction, list it high with an REO agent and eventually accept a very low offer (perhaps it will be mine). I guess that’s how it goes sometimes….

The moral of this story for me was to never take on marginal deals when your gut is telling you you’re buying too high and so they’re priced too high wholesale. This would’ve been a different story had I had a buyer lined-up that was willing to pay the price I was asking. In that case, 6K for just a few hours of work isn’t bad. But in my case, even if these deals did go through, it would’ve been a total of 6K for hours and hours and hours spent….too much like a job.

No more ‘marginal’ deals for me. Not worth it.

- Peace

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