One of the greatest skills that successful wholesalers posses is the invaluable skill of generating, uncovering or creating great deals on real estate. If you can become a master at this one skill you can create a wildly successful real estate investing business.
For those wholesalers/investors that stick with the business long enough, it is just a matter of time before you come across what I call a “Home Run” deal or “Grand Slam” deal. These are the needles in the haystack or the nuggets of gold you find while sifting out everything else in order to find gold flakes. Just one of these deals a year can make a huge impact on your business.
In this case study I would like to give you a run down of a home run deal that I just closed on.
This lead came from a postcard mailer. The seller lives out of state and just inherited the home from her deceased mother. She just wanted to cash out of it and be done.
The seller was hoping for somewhere around $200,000 as she was told it was worth about that price. It appeared to be a great price already so I went out to take a look at the property.
The exterior of the home was a bit distressed, as I expected, but the interior was in much better condition than I though it would be. There was a long term tenant in the property who had been there for 7 years and kept the interior immaculate.
I knew after viewing the home and driving the comps that it was going to be a great deal.
I decided to offer $170,000 expecting to haggle a little. To my surprise she said, over the phone, “Done”. She verbally accepted my offer without any hesitation and she was absolutely thrilled.
This was one of those “To good to be true” moments. I even second-guessed myself wondering if I was missing something.
I took an even deeper look at the comps in the neighborhood and there was nothing I missed.
We opened escrow immediately after she signed the purchase agreement and began to move forward as planned.
One thing that I have learned in all my years in the real estate business is, never celebrate until escrow has closed and has been completely funded. Ask me how I know this.
I received word from the title company that there were other siblings in the picture which the seller had never mentioned. The deal came to a screeching halt. I then learned that the seller had 2 sisters, which she was on bad terms with and an aunt that was entitled to a portion of profits as well.
This was one of those gut-wrenching moments where I just wanted to scream. This deal had the potential of putting a good $50,000-$60,000 in my pocket as a wholesale deal or $100,000 if I fixed and flipped it. I saw this money going up in smoke after hearing the news and the seller confirming the situation. I knew at that moment the deal was dead in the water w/ little chance of revival. After all, how are three other family members all going to agree on the price I offered especially when they could just list on the market and receive much more?
I checked in with the seller every now and then to see if any progress had been made with her family. This went on for 5 long months. I really didn’t have any faith that it was going to work out, at least not for the price that we had agreed on.
To my surprise, after those five long months, she was able to convince the family to move forward and get the needed paperwork completed for the title company. Woohoooooooo! I can’t explain how shocked I was that this deal came back from the dead.
If you have been following my blog you will notice that I talk a lot about following up on your leads. This is a crucial part of maximizing your profits and growing a very successful wholesaling/real estate investing business.
This deal took 5 months of follow up to close. So, the lesson here is to relentlessly follow up on your leads. You never know when a seller’s circumstances are going to change.
The other lesson is to always try to get a number out of a seller. Find out how much they are looking to get for their property. Some will not want to give you an answer but it is important to not just ask once but try multiple times throughout a conversation as you are building more rapport. Had I not know that she was seeking $200,000 I may have offered much more for the property.
There you have it, my latest Home Run deal. These deals are out there but you must take massive action if you want to find or create them. Get out there and find your next Home Run Deal!!!
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!!!