offer from https://selllandsimply.com/

[terracore]

In the mail today I received an unsolicited cash offer for a vacant lot we own in OLE for $12,797 with them paying all closing costs and title fees. Most similar vacant lots are going for $30-40k so I guess I understand their strategy.  And I'm sure there is room for negotiation.

One can also go to their web site and request to sell their land.

I've never heard of them before.  Just passing along info.  If somebody could get them to come up in price and wanted to skip the hassle of using a realtor, paying realtor commissions and a portion of title insurance, it could be worth it if you got the land cheap and want an easy solution.  They probably make their money by buying the land at 50% and then screwing the buyer in a finance situation.

Using a "base price" of a $30k lot, minus standard realtor commission and half the title fees would net the seller about $26.5k which is pretty close to double their offer price of $12,797.

[HereOnThePrimalEdge]

I get offers like that about once a month for a lot I own in HPP.  They’re fishing.  I assume they hope to hook someone who’s financially strapped for cash, or behind on their real estate tax payments.  If they get one response (and subsequent sale) for every few thousand letters they send out, they’re money ahead.

[nogrid4me]

We got a lot of offers like this when the pandemic first started.  Super lowball offers, like $4k for $25k property.

[terracore]

We sold a property as an owner finance and we would get an offer about every 4 months from a company wanting to buy the finance contract from us. If I remember correctly their offer was about $6k under what the buyer owed us. And all the interest they would collect, of course.

I would have considered it if I thought the buyer was a problem or might stop making payments or something, but otherwise it would have only appealed to somebody who needed a lump sum right away.

[HereOnThePrimalEdge]

if I thought the buyer was a problem or might stop making payments 

But then you take back the property, keep the money and resell it, right?

I remember hearing about a guy in Puna who made his living selling vacant lots with small down payments.  Many (most?) of his buyers had little money to begin with and inevitably couldn’t keep up the payments.  Then he’d take back the property and sell it again.  It was all spelled out in the paperwork, so was on the up and up, more or less.  But I don’t know how he slept at night both for questionable business practices that preyed on the poor, as well as worried that a noise out in his yard at midnight might be a former buyer skulking around for a visit.

[terracore]

"But then you take back the property, keep the money and resell it, right?"

Maybe not a bargain if they put 300 cars there in the interim.

[leilanidude]

I remember hearing about a guy in Puna who made his living selling vacant lots with small down payments.
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There are a few doing that, even a few companies. I know of 2 women who bought lots this way. Both have been paying religiously and were delighted to be able to finally get their own land. One now has a small cabin on hers. Hew land payment is way less than any rent she would have been paying. I do not think that either one thinks they were preyed upon even though the interest rate is near 10%.

[HereOnThePrimalEdge]

 I do not think that either one thinks they were preyed upon 

I’m glad it worked out for them.  I’m sure others have successfully bought properties from those sellers, just as some people have benefited from a payday lender loan.

My point is, if your business model relies on selling the same lot 5 times to 5 different buyers, it benefits the seller more than any of the buyers, even more than a buyer who can regularly and successfully make their high interest payments.  

It’s also different from an individual who sells a lot, discovers the buyer doesn’t make monthly payments, and has no alternative but to sell the paper or repossess the property.  That seller would rather just get their monthly payments and be done with it.

[randomq]

Is it unethical to expect adults to make sound financial decisions? It seems our culture wants to infantilize adults. Ironically in things like financing and building codes it is making people less safe and less secure as it prices them out of the market.

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it benefits the seller more than any of the buyers

Not necessarily, considering the cost of rent in Hawaii. A couple years in a shack on unimproved property might still be a net win.

[dobanion]

I sold one lot in Kau on contract. But I knew the guy. Worked out great for the both of us. He got the lot, and he paid me every month, on time.

Probably way outside the norm.