CASH BUYING HOME BUSINESSES THAT BUY "AS IS" PROPERTIES ARE JUST THAT.
Here in San Diego you cannot get away from the ubiquitous ads for I BUY SD or Sundae Inc. and of course there are many, many others out there.
These types of companies generally "aggressively hunt" for distressed properties meaning ones generally owned by the elderly that have had little to no maintence in the last 20 years or more. They also tend to harrass homeowners with unsolicited sales offers through mail and phone calls and badger realtors to give them listings not yet up on the internet or MLS. Their solicitation tactics can really straddle the law into illegal pratices at time.
Their offers of course will be low ball because they need to fix up "flip" the house and make a profit for themselves but they can and will be SIGNIFICANTLY LOWER than if you fixed the property up yourself with professional licensed contractors when needed and then contact a real estate company to get it on the MLS and start getting competitive bids.
But if you know what you are getting into they might work for you.
STEP 1 - Get 2 appraisals - BEFORE YOU DO ANYTHING ELSE!
No matter what your situation is I recommend getting not one but two appraisals. At around $1,000.00 or less per appraisal that is an insignificant amount for the property especially in San Diego County.
Once you have that you are ready to take the next step in whatever you decide to do but at least you will KNOW THE REAL VALUE OF THE PROPERTY and will not be taken advantage of.
PROS - Of going with a "cash buying home" business.
1. You live out of State - from a property you just inherited and do not have the time to deal with it.
2. An elderly relative either needs to move - into a facility now or has recently passed and the house needs a lot of work to get it on the market and you do not have the time.
3. The property is a hoarding mess - and you do not want to deal with it.
CONS - Of going with a "cash buying home" business.
1. Low ball offer. Sometimes they may even try to draw you in with a higher offer then try to lock you in to a lower offer in the end.
You will be getting a SIGNIFICANTLY lower amount than the current appraised value. Some customers have complained the offer was only 1/3 of the appraised value and in San Diego that may be hundreds of thousands of dollars less than if you had fixed the house up yourself and gone with a realtor and MLS listing on the open market.
2. No room to negotiate - the price like you would on the open market.
So as long as you know what ou are getting into with a "cash buying house' company it may work for you but at the very least get an appraisal first.
On the other hand if you or a relative are being harrassed from one of these "cash buying house" companies with unsolicited calls, mailers etc. file a complaint in the following places below.
WHERE TO FILE COMPLAINTS
Yelp - Under companies name
Google Reviews - Under companies name
Better Business Bureau of San Diego
If you want to go a step further you can also use social media platforms like
Facebook
Instagram
Tiktok
Reddit
Next Door
CITY ATTORNEY COMPLAINT FORM
If they do not quit contact our City Attorney, there is a possibility if they get enough complaints about a particular company they might act.
Click on the link below to see more information and file a complaint with the City Attorney's office
https://www.sandiego.gov/city-attorney/resources/affirmative-civil-enforcement-unit
PLEASE be especially watchful of elderly relatives or neighbors who may have some cognitive issues who may be vulnerable to high pressure sales tactics on their homes.
Sundae Inc. and IBUYSD scam or just low ball cash offers?
Here is what ChatGPT has to say
1. The "Family Business" Mask
Many of these companies use branding that implies they are local, lifelong San Diegans who "care about the community."
The Reality: While the owners might live locally, the funding usually comes from private equity investors or a hedge fund.
The Goal: The "family" image is a marketing tactic designed to lower your guard. It makes the negotiation feel personal rather than transactional, which is useful when they are presenting you with a low number.
2. The "Lowball" Math
They generally operate on the 70% Rule, which is a standard formula for house flippers and investors. They aim to buy a property for 70% of its "After Repair Value" (ARV), minus the cost of repairs and closing costs.
Example: If a fixed-up house in San Diego is worth $800,000, but needs $50,000 in work, their math might look like this:
$800,000 (ARV) x 70% = $560,000
Minus $50,000 (Repairs) = $510,000 Offer
To a seller, $510k feels like a massive lowball compared to the $800k market value, but to the investor, that is their required margin to pay their investors and make a profit.
3. The "Masquerade" Aspect
The part that feels like a masquerade is usually the "As-Is" promise.
They market that they "buy any house in any condition."
The Catch: They do buy any house, but they adjust the price aggressively to account for every possible defect. They deduct for a new roof, plumbing, paint, and landscaping at contractor rates (not retail rates), which drives the offer price down significantly.
4. The Exit Strategy
Private equity outfits aren't usually buying these houses to hold them as rentals (though some do). Often, they are acting as a wholesaler.
They tie up your house with a contract.
They then flip that contract to another investor for a fee (assignment fee) without ever doing the work themselves.
This means they lowballed you and made money just by being the middleman.
Summary
You are essentially looking at a distressed asset acquisition firm. They provide a service (speed, convenience, certainty) that has value, but they extract that value in the form of equity (a lower purchase price). The "local family" branding is just the packaging for a high-margin investment strategy.