Solano Real Estate Scene: Jim Porter
Article By: Jim Porter – May 23, 2025
Have you ever seen a home for sale advertised for all-cash buyers, or a house so trashed the listing agent calls the house a “contractor’s special”?
These are homes that the Realtor thinks a buyer will have a tough time getting a loan because of the home condition.
Have you ever been shopping for a home and walked into an open house and just turned around in two minutes and left because it was dirty and hadn’t been painted in 20 years and both the front and back yard grass was just plain dead? Have you ever heard the advice that it is a good idea to buy the worst house in the best neighborhood?
If you are looking for your forever home that you will live in for the next 40 Christmas mornings or you are a first-time home buyer looking for a starter home investment that you will sell in 5 to 10 years when you are ready financially to move up to your forever dream home, don’t ignore trashed homes or homes that have not been remodeled in 40 years.
Professional flipper investors love these homes because they know that the bones of the house and the neighborhood are the most important factors in real estate investing. Some of the successful local flippers I know take advantage of these opportunities with almost no competition from buyers that are looking for a home to live in with their family and a place to store all their pets, cars, and stuff.
Sellers take all-cash-as-is offers from pro-flippers that can close escrow in 10 to 21 days with no appraisal, and in some cases, no inspections because the super pro flippers have their contractor with them at the open house and some flippers are general contractors themselves.
These sellers will often sell their house for $50,000 to $100,000 less than an owner-occupant buyer willing to do an FHA 203K or Freddie Mac Choice renovation loan because this home buyer will need 35 to 50 days to close escrow on this type of loan and the Realtor may feel that $450,000 in the hand in 20 days is better than $500,000 to $550,000 in the bush that might take 40 days.
Is an extra 20 days of waiting worth $50,000 to $100,000? If a first-time home buyer is pre-approved to buy a house for $600,000, this buyer can buy that trashed house as is for $450,000 with 3.5% to 5% down and some of us local lenders that offer renovation loans can close escrow in 30 to 45 days, and then lend the buyer an additional $100,000 to completely renovate the home after the close of escrow with a qualified general contractor.
The key question is what the after renovation value will be after the house is fixed up. If the ARV is $600,000 on a house you buy for $450,000, the Freddie Mac Choice Renovation product will lend you up to $570,000, which gives the seller $450,000 and you the buyer $120,000 to make the place look brand new.
Jim Porter, NMLS No. 276412, is the branch manager of Solano Mortgage, NMLS No. 1515497, a division of American Pacific Mortgage Corporation, NMLS No. 1850, licensed in California by the Department of Financial Protection and Innovation under the CRMLA / Equal Housing Opportunity. Jim can be reached at 707-449-4777.
