Your third slice of #iBuyer pie: Flip to the schmoos. Repeatedly.

When Wall Street finds itself overcome with an uncontrollable obsession to overpay for bread-and-butter homes – make toast.

I’ve already talked about two ways to take advantage of the vast naiveté and ineptitude of the iBuyers:

  1. As a Buyer’s Agent, you can spank them thoroughly on resale, paying Fair Market Value or substantially less, regardless of the absurd list price – generated by “pricing algorithms”, “machine learning” and a monkey with an abacus. Then you can spank them again on repairs, because they’re more interested in putting up numbers than making money.
  2. As either a seller or as a Seller’s Agent, you can pit them against each other to maximize your return. As an easy gut-check, if the best iBuyer offer will net less than 92% of FMV, you’re probably better off listing traditionally. Going forward, their offers will increase, as they try to out-bid each other. Try not to be too morose as you bank their unwanted funds.

The third way?

Stop being the middle-man and start being the supply chain.

In other words: Flip to the schmoos. Repeatedly.

They need product. Constantly. You can’t be a retailer if you let the shelves go bare. Moreover, although they don’t seem to understand this yet, they need product they can move with dispatch.

That makes every good Realtor an invaluable resource for the iBuyers: You can surface homes they should buy, and you know how to rehab them to maximize return – yours and theirs.

As Dave Liniger taught you long ago, they need you more than you need them. Better news: They are perfectly happy to pay full price for your expertise.

At Brian Brady’s iBuying class, I’ll be talking about ways to flip to iBuyers while minimizing risk, outlay and your own Days-out-of-Pocket, but the beauty is all at the back-end: By flipping to a known, reliable, quick-closing buyer, you can double or triple the number of homes you can handle per year – while building a floor under your business model.

The risk in flipping is resale. Turned right, priced right, even the best opportunity can still take time to find its buyer. And the buyer can fail to qualify. And the longer it takes to close, the greater the chance for failure. All at 1.5+% a month interest on the borrowed funds.

The right house flipped to FHA standards or above is what institutional buyers of all kinds need – market-ready and mother-in-law clean. They will pay at or near FMV to get it, and you will have left them nothing to bitch about on repairs.

Accordingly, you can turn your money over in a month – or even two weeks. Start the iBidding process as soon as you have the legal right to market the property, while you are doing the rehab. Close and cash out, rinse and repeat.

I can show you partnering schemes that will limit your own outlay, but flipping is product first – and you are the boots on the ground. You can identify and maximize better opportunities for iBuyers than they can procure on their own – and they will pay you handsomely for your expertise.

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