Here’s Why Investors Have A Reputation For Making Low Offers

Investor signing an offer for a house

It’s no secret, real estate investors have a reputation for making low-ball offers on properties.

So much so, you may have had an investor call you about a property you own, and you just hung up on them.

For this article, we’ll mostly be discussing situations where an investor is making an offer to buy a property in need of repairs, a.k.a, a fixer-upper.

Let’s dive into the legitimate reasons why investors may not make you an offer as high as you had hoped.

Investors Take on Significant Risk

The recent explosion of house flipping shows on HGTV make it seem like renovating a house is so easy.

Everything from:

  • Finding

  • Buying

  • Renovating

  • And reselling the property

Is boiled down into a one-hour television show.

Sure, every episode may have some drama, but they do not do a good job showing the significant risks investors take on each time they buy a new property.

When buying a fixer-upper, investors may have to deal with:

  • Old, dangerous, and outdated electrical work

  • Outdated, possibly leaky plumbing

  • Roofs that need replacing

  • Hidden foundation issues

  • Hidden pest and termite issues

  • There could be all kinds of hidden surprises behind the walls that are impossible to see

Dealing with all of these issues costs a ton of money.

A failing foundation alone can cost upwards of $30,000. Or, if it’s bad enough, the house may have to be torn down and rebuilt!

A house you’ve been living in for decades may seem fine to you, but in reality, it might need six figures worth of work to get it up to modern living standards.

Investors have to factor in these risks when making an offer to buy your property.