Being a full time real estate investor has its ups and downs. It is really like a roller coaster full of highs and lows.
The feeling that moment when you close on a great deal that you know will be a homerun is absolutely priceless. On the other hand, when the homerun slips through your hands and is lost for good, it can be a very frustrating experience.
The Deal Specifics
In this post I would like to tell you about the most recent deal that slipped through my hands. This deal would have made me about $30,000 if wholesaled and over $70,000 if rehabbed.
This lead came from an inheritance list. One of the siblings that inherited the house responded to a simple post card that was mailed to them.
In the very first phone call, I knew it was going to be a great deal. This lead was the needle in the haystack that we are all searching for.
The home was in major need of repair. Just before the father passed away the roof of the home was being fully replaced. The roofer convinced the father to give him an advance on the job. Once the roofer received the money he disappeared.
All of the shingles were removed from the roof and some large storms moved in. This created a great deal of water damage especially in the kitchen where a large part of the ceiling collapsed.
The home needed to be completely rehabbed. There was really nothing worth saving except the newer vinyl windows.
On the first call I found out that the home was recently appraised at $140,000. I asked the daughter how much they were hoping to get for the home and she said $100,000.
I was really shocked that she was only asking for 100k. They were looking for a quick sale.
I knew that the after repaired value on this home was about 270k and that there was a huge spread on this.
I found out that there was one other investor in the picture interested in the home. I also found out that they were talking to an agent friend of theirs about listing the home.
I knew that I needed to act quickly on this one so I set up a time to view the home the very next morning.
After looking over all of the numbers and viewing the comps I decided to email the daughter a cash offer for the exact amount she asked for, 100k.
I asked that she have it signed by her siblings and to bring it to the home when we meet. I said that if the inspection went well, we could move forward with the contract.
The dilemma that I faced before I made the offer was an ethical one. The daughter was asking for 100k and I knew that I could pay much more than that. I really could have come up about 130k or more.
I went back and forth on whether I should offer a little more than she was asking.
I would never want to take advantage of a seller by any means. After debating this for a while I came to the conclusion that because they actually new what the value of the property was, I was definitely not taking advantage of them. They paid to have an appraisal done on the home, which showed a value of $140,000.
The inspection went very well. She really did a great job of preparing me for what I was going to see. She described the condition very well.
The daughter did not bring the signed contract. The reason was that her and her siblings had many concerns. They wanted to make sure that myself and my company was legit.
I made sure that I addressed each and every concern that she had to help her rest assure that my company was a reputable one. We parted with the plan of having a conference call so that her siblings could speak with me as well.
The inspection was on a Friday. 3 long days went by without a response from the daughter. I tried calling her, left a message and sent an email, but no response.
I was dumbfounded at this point. I had offered them exactly what they were asking. I even sent them a credibility email with references.
I knew at this point it had to be about money. I felt that they had changed their mind and now looking to get more money for the home.
4 Days Later
Four days later I finally heard back from the daughter. She informed me that they decided to list it with their agent friend.
At this point I tried to find out how much more they were really looking for. I let her know that she could still have the agent represent them but I could still buy it from them.
I let her know that she had a solid buyer in front of her that has already seen the home and is ready to close in under 2 weeks. If she listed on the market it may be a few months before she received the money and may even have buyers that back out.
Last Ditch Effort
My last attempt to save the deal was to get in touch with their agent to see if I could still buy this before he listed it on the MLS.
I knew that once the public new about the property it would be snatched up quick and I would lose out.
I asked the agent to find out how much more I would need to up my offer to where it made sense for them to go with me rather than place on the MLS.
The agent was going to talk with the siblings and call me back. I never received that call on that day.
The very next morning I called up the agent to find out what I would need to offer to move forward. He proceeded to tell me that he placed it live on the MLS and accepted an offer already with multiple backups.
Ahhhhhhhhhhh!!!!!!!! I can’t begin to explain how frustrated I was at that moment. The agent didn’t even give me a chance to up the offer.
That feeling of knowing that $30,000-$70,000 just slipped through my hands was a gut wrenching feeling.
This was a low point on the roller coaster.
After this deal fell apart I kept thinking that if she would have only stated a higher number from the get go the outcome would have been different.
If she would have asked for 120k or even 130k, I may have still picked this deal up.
The numbers may not have been as good but still a deal never the less.
Keep Moving Forward
In my mind I only had one option and that was to pick myself backup and continue to move forward.
These moments are the nature of the business. Real estate investing is not for the faint of heart.
If you are a real estate investor or looking to be one, you will have deals fall apart. It is inevitable.
Just know that the next home run is right around the corner.
Keep pushing forward taking massive action and you will find bigger and better deals.
I hope that this post was very helpful to you. If it was, please share with someone who you think may benefit from it.
Here’s to your success!!!
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