This post goes out to all of you that are still looking to close on your first deal and to those of you that may be struggling to lock up your next one.
There are great deals out there, even in the competitive market that we are currently in.
I am going to break down how I found this deal and what was involved with negotiating and closing it.
How Did I Locate This Deal?
This deal came from a Driving for Dollars campaign.
This neighborhood was not one that I expected to find a fixer but I decided to take a drive through it anyways.
I found a couple that were mild fixers from the looks of the exterior but they really were not bad at all.
Here are 3 pictures of the exterior of my deal.
Time To Get In Touch with the Owner
Once I returned to the office, I pulled up the properties to see if they were owner occupied and to also get an idea of how much may be owed on them.
There are many companies that offer this information online but you can also pull up tax records through your city as well.
Property Radar is available in my area and I have found it to be a great source for this data.
I decided to send a mailer to the homeowner. The mailer I chose to send was actually a nice greeting card style with my company name and logo on it.
The inside of the greeting card had a handwritten message that read:
Dear Johnson Family,
I am interested in purchasing your house located at: xxxxx Rd
If you have thought about selling your house & would like to do so quickly & hassle free, I would like to make you a Fair Price Cash Offer for your house as it sits right now.
If you would like to discuss this further, please call me at xxx-xxx-xxxx
5 Months Later I received a Call
A total of five months went by before I received a call in regards to this house.
The daughter of the owner left me a message stating that she inherited the house and was looking to sell it as soon as possible.
This sounded like a great lead to me. I quickly pulled it up on line and saw that it was owned free and clear.
I ran some quick comps and felt that fixed up it could sell for about $460,000.
After a very quick phone call to the daughter I found out that the home was all original 1984 interior. I also found out that she was asking $350,000 but it was negotiable.
I knew I had a deal if I could negotiate the price down at least $15,000.
I set an appointment to meet her at the home the following day. I knew that I couldn’t waste any time just in case she was reaching out to other investors.
I noticed right away that the daughter was very introverted. She was not very conversational at all but she was very polite.
It was a bit difficult to build rapport because all of her responses were very short.
I knew that I needed to take a calm gentle approach with her, which was easy because that comes naturally to me.
After her showing me around the home I asked her where a good place would be to sit down and discuss further.
I wanted her to choose where we sat to make her feel most comfortable.
I could already sense that she felt really awkward and uncomfortable. She chose to sit at the kitchen table.
I gave her a breakdown of how my process worked and all of the benefits of working with my company as well as an explanation at how I arrived at my offer, which was 307k.
Before the appointment I was going to offer about 320k but at the last second I decided to throw out 307k to see how she responded.
To my surprise she told me she needed to get 315k. I knew right then it was going to be a great deal and even better than I expected.
I didn’t want to say yes immediately though. I put some thought into it. Looked back over my numbers and then let her know I could split the difference with her to come to 311k.
I thought she would bite but she held to her guns at 315k.
I let her know that I wasn’t sure if I could do it. I took one last look around the house then finally agreed to her price of 315k.
We signed the contract but needed to put the closing back 3 months.
Her brother was going to turn 55 in 3 months and then he would be able to move to a 55+ community. He was currently living in this property so we needed to wait.
My purchase price on this home was $315,000.
The After Repaired Value was $460,000
Estimated Repairs- $35,000-$40,000
Wholesale Fee- $30,000
I Made A Mistake
For this deal I actually brought in a buyer that I had not done business with before.
This was a very reputable company that I knew did a lot of flips in the area.
In my contract with the seller it stated that buyer was to pay for ALL closing costs.
I failed to mention this to the end buyer and they were caught off guard by the additional expense.
I really wanted to net a round number of 30k on this but I knew the right thing to do was to eat the closing costs of the seller, which is what I chose to do.
I ended up netting $28,289.50 after paying for the sellers closing costs.
Below is a copy of my check.
This entire deal from the moment the seller called me to the time I closed on it, was less than 10 hours of my time.
There Are Plenty More Deals Out There
I want you to know that there are plenty of deals out there right now waiting for you to have enough courage to take the action that is needed to find and create them.
If you are struggling right now to do your first deal or even to get that next one locked up, remember this, if you are willing to do what your competition is not, you will be able to have what they do not.
Keep pressing forward and you will lock up that first deal or your next deal. It is just around the corner!!!!!
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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