Not all Investor Buyers are Created Equal

Think you need an Investor Buyer to purchase your Kansas City Metro Area Property.

You may have a selling motivation that puts you on a list somewhere, like evicting tenants, code violations, out-of-state owners, inherited property, etc.  If you are on a list somewhere, you probably will be receiving a bunch of automated texts, a lot of automated phone calls, and random cold calls from people that may speak less than-perfect English. You may also get a mailbox full of letters and postcards. .  Or maybe you have not received a solicitation to sell your house, but you have gone online to find a buyer and contacted several people.

Let us first address the random cold calls, automated texts, and phone calls, these are becoming much more heavily regulated and can generate huge fines. While a lot of our competitors are using this very successful method of marketing, we find it very annoying ourselves so we don’t market that way. We do send out texts to people that have contacted us about selling their house as a follow-up, we also make phone calls and emails. We do however employ the time-tested method of marketing which is direct mail, just like you get advertisements in the mail from the local Grocery Store or Walmart, if you are in our target market you might get a letter or postcard telling you about our home buying services.

We are professional home buyers, and as investor buyers and we are a bit different than many of the other people who say they are home buyers.

I want to make sure that you understand as a home seller that not all investor buyers are created equal.

Case in point:  

A few weeks ago, a seller, let’s call him Bob, called us up.  He had a house that had been a rental house, he had listed it for sale and it didn’t sell.  He thought that it would be worth about $85,000 if repairs were made to it.  He wanted about $75,000 for it.  However after we, as buyers reviewed the photos, we really thought we would only be able to offer about $55,000 based on the value of $85,000 after it was fixed up. The amount it would cost us to make the needed repairs, the amount it would cost us to hold it for several months in interest, utilities, taxes, and insurance, the risk of holding a vacant house, and then the costs to sell it.

Bob told us that $55,000 was way too low and that he had another buyer who had made him an offer in the upper $60’s.

So we wished Bob well with his upper $60’s offer, assuming he had another cash buyer like us.


Bob’s Buyer was not a Cash Buyer but actually a person who is learning to be an investor, but had received really bad training.

Fast forward about 2 weeks and an investor, let’s call him Joe, emails us with a house.  Joe is not the owner of the house.  He has it under contract to buy and needs an end buyer with cash who will buy it from him so he can complete his purchase.  If I act fast and can close in 3 days, he will part with the house for $85,000 and if it takes me a week, well then he would definitely need $99,000.  

I look at the house and notice it is Seller Bob’s House.

Now I have to say that Joe is doing so many things wrong on so many levels that it’s not even funny.  First Joe has no idea what the house is worth or he would not be trying to sell it for $85,000 or buy it for mid $60s.  Second, it does not matter if I buy it in 3 days or 10 days, either way, it’s still not worth $85,000 or even the mid $60s he is paying for it.  Third, Joe is out there marketing a house for sale that he does not own and that is illegal – unless he is a licensed Realtor with a valid listing agreement with Seller Bob, which he does not have. There are right ways to go about marketing a wholesale contract and Joe was not following them.

Now here are some questions we should have asked Seller Bob about his Cash Buyer in the upper $60’s and Bob may have decided he would rather go with our all-cash offer closing in a couple of weeks at our lower $50’s price.

Question 1:  How long they have been in business and how many houses they have bought?

Home purchased, renovated, and resold in Kansas City.

Here at kcmoHomeBuyer, Don & Kim have been buying houses for investment since 1999. We have bought and sold hundreds of houses and we have only backed out on 1 due to inspections and finding major termite damage that the bank seller had covered up.  A fairly good track record over the past 20 years.  

Many new investors read a book about buying and selling houses and just go out there to try to do a deal.  They know nothing of what houses are really worth, what repairs will cost, how to figure out holding costs, and other expenses.  They just agree to whatever price the seller is asking and then try to sell it.  If they can’t sell it they either walk away from the deal or ask the seller to lower their price, either way, they are really out nothing.  The seller, on the other hand, has just lost valuable marketing time and had to pay several more months of mortgage payments, taxes, insurance, utilities, and maintenance.

Do you really want someone who has no idea what they are doing wasting your time?

Question 2:  When will you be closing?

Time and again, here at kcmoHomeBuyer we get beat out by a higher-priced offer.  However, that higher-priced offer is going to take 30, 60, or 90 days to close.  Why?  Well, you see the buyer needs time to find a 3rd party to buy it.

Here’s how it works: Seller Bob gets a contract for Buyer Joe to buy for say $65,000.  Then Joe goes out and tries to sell it for $85,000 to kcmoHomeBuyer.  Joe needs the proceeds from his sale to kcmoHomeBuyer so he has the money to actually buy the house from Bob.  And if kcmoHomeBuyer can’t buy or in our case tells him he is way off in his numbers, Joe will keep marketing it to every potential buyer he can find until his 30, 60 or 90 days runs out.  And if he can’t find that third-party buyer, Poor Seller Bob does not sell his house and has to start all over marketing his house for sale.

If kcmoHomeBuyer writes a purchase contract on your house for a specific dollar amount, we will be closing on it on the date in the contract, which is typically about 2 weeks. Sometimes it can be sooner and if you would like it to be later, we can do that too.

Question 3:  What are your intentions?

Find out what the buyer intends to do.  Ask them point blank, are you going to buy it on or before the closing date, or are you just trying to find another buyer who will buy it from you?  If they are trying to find another, then ask them how that will work.

At kcmoHomeBuyer we sometimes will sell a house to another investor buyer who has a bit more time to devote to renovations, but only after we have paid cash at closing and then marketed the house out for sale.  We will often come in and make minor repairs or sometimes completely renovate the whole house and then sell it.

Or if the seller may want more money than we think we can pay, we may offer an option contract at a higher price that gives us the option to purchase, and then we share the house and that option contract with our investor friends to see if one of them might like to purchase our position in the contract. We will let you know we are doing this and we try to keep this under a 2-week time frame. And if we can find another investor who would want to buy our position, we will exercise our option to buy and if we don’t, well our option will expire and we part friends.

If you have a house that we just don’t want to buy, either it is not our area, or the condition is just too scary (we have only ever found one house that was just too scary) we have other options we can offer.  

Question 4:  Are you licensed?

Not all investor buyers hold a real estate license.  It is not required.

YET . . . several states are working to change this and require all investor buyers to be licensed Realtors.

We are already licensed Realtors. We have been since 2000 and we find this to be a very helpful tool in our toolbox if your house just does not fit our criteria.  We usually come across one or two sellers a year that want more for their house than we would be willing to pay, generally, not a lot of repairs are needed to make it sellable.  They have a great property that we could sell for what the seller is asking and still get paid a commission and do it in a timely fashion.  We then listed the property, marketed it for sale through the local MLS, and found a buyer who closed, with the whole process was completed in 2 to 3 months and the sellers got their price, sometimes a little more, thus earning us our real estate agent commission.

So if you want an all-cash offer on your property that you know is going to close on the day of your choosing, please take 5 minutes to tell us about your property and your situation. We can walk you through your options so you can make an informed decision.


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