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Out of state motivated seller

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Charles Kuchlenz

Multi-family Investor from Eau Claire, Wisconsin

Jul 08 '13, 08:03 AM


I have recently come across a property which looked vacant and decided to do some digging. I searched the county tax records to find that the owner of the property has been current in paying the taxes for the past 5 years, but lives in TX (I am in WI). I sent a letter explaining that I would be interested in purchasing the home and have received a response from the owner's daughter stating that her parents are looking to sell. I would like to wholesale this property if we can negotiate a proper price.
Are there some things that I should be considering when negotiating an out of state deal? How would you structure the closing?



Tom W.

Florida

Jul 08 '13, 08:46 AM


Check out the house, come up with your number (not sure if you need help with ARV, Comps, etc as it wasnt mentioned.) Tell the homeowner what you want to offer or put it in writing and send to them.

Once they sign, if priced right and a true wholesale deal you will get find a buyer (which can be another question but plenty of info in other threads). Get contract with them, open escrow with Title company and they will coordinate closing with sellers, they dont have to be local to get completed. Explain to sellers you will make as easy as possible

Hope that helps



Charles Kuchlenz

Multi-family Investor from Eau Claire, Wisconsin

Jul 08 '13, 12:05 PM


Thank you for your response.
I would also like some help on determining the ARV. I can't seem to find any comps to a 1 bd/1 ba 875 sqft SFR in my area. The contact mentioned they would accept 30k but I have not had a chance to look at the property yet. It looks as though it has been vacant for a while. Where could I pull comps in this situation? #needRELicense



Tom W.

Florida

Jul 08 '13, 08:53 PM


Hey @Charles Kuchlenz, I would try to search any online resources, or maybe realquest ( I think they offer a per search type product now where you only pay for the search you used). Realquest is very good info and they get their info from the county. Closest you can get without getting access to MLS.

Also if you can try contacting a realtor who will or can help you with getting MLS comps or their opinion on what they think a like property is worth



Charles Kuchlenz

Multi-family Investor from Eau Claire, Wisconsin

Jul 09 '13, 09:30 AM


Thank you W Tomsin!
Update: The seller does not have a local contact. How would you ask for access to the property with no personal relationship?


Edited Jul 9 2013, 09:39 by Charles Kuchlenz


Tom W.

Florida

Jul 09 '13, 01:24 PM


@Charles Kuchlenz, Does the seller have a key? See if they will mail it to you. Or possibly give you the rights to access. I have had sellers tell me they have no keys, no body with keys and wont come to town to help me get inside. I get them to give me written permission to access property and then I call a locksmith.

Hope these ideas help.



Charles Kuchlenz

Multi-family Investor from Eau Claire, Wisconsin

Jul 09 '13, 01:31 PM


W Tomsin, yes, the daughter agreed to mail me a key. Now to evaluate the property and negotiate a price. Thank you for all of your help. Here's to taking action!



Paul Sorgi Verified

SFR Investor from Abington, Massachusetts

Jul 09 '13, 01:46 PM


Great job @Charles Kuchlenz for taking action!



Paul Sorgi,
Telephone: 781 534 9610
[email protected] 781 534 9610 anytime


Tom W.

Florida

Jul 09 '13, 03:05 PM


Awesome job @Charles Kuchlenz! Just take everything step by step, and if you have questions dont hesitate to bring them here. Also there is a thread where @J Scott has a excellent report where he explains getting the correct ARV. I am sure it will help you. Or you can use the search bar and look for past post on ARV also. Keep it up



Tj Hines

Wholesaler from Hudson, Florida

Jul 09 '13, 07:39 PM


There is nothing to really consider when negotiating with owners of the property located in the same state you live in. Now if you were trying to buy a property out of the state from where you live in, there would be a lot to consider.

Considering the house is vacant and the owners live out of the state, I don't see any reason why you couldn't negotiate one hell of a price to create a nice enough spread where you can step in and profit.

Once the owners agree to your price send them an standard as-is contract. Get it signed, market the property, find your end buyer and assign the deal to him for a fee. This way you don't have to worry about paying any closing costs.



Kim Bunn

California

Sep 06 '13, 08:36 PM


i'm interested to know how this deal turns out. please update us. Thanks.



Account Closed

Dallas, Texas

Sep 06 '13, 08:43 PM


Charles,

Make sure you are upfront with the seller and let them know you are not the buyer and you will be wholesaling the property.

Joe Gore



Bill Mitchell

Mansfield, Texas

Sep 06 '13, 09:00 PM


Originally posted by Joe Gore:
Charles,
Make sure you are upfront with the seller and let them know you are not the buyer and you will be wholesaling the property.

Joe Gore

I sort of disagree. Dont mislead the seller, but don't try and explain wholesaling to them, you will needlessly scare them. Just say that you are the buyer and work with a funding partner, done.

I put and or assigns on the contract and everything, even on my own personal addendum the right to show and market the property. But I don't even mention anything about it unless they otherwise bring it up.



Account Closed

Dallas, Texas

Sep 06 '13, 09:05 PM


Bill,

Lets say he follower what you say and the seller say lets open escrow with $1000 and if the buyer dont then the seller will know that he is not a buyer. Honest is the best policy.

Joe Gore



Charles Kuchlenz

Multi-family Investor from Eau Claire, Wisconsin

Sep 06 '13, 09:08 PM


As it turns out, the owner had purchased the property for 25K out of foreclosure a couple of years ago and they were looking to make their money back. I calculated that the ARV would be around 65-70K needing about 25K in rehab costs. I offered the seller 12.5 to start and had even found a buyer who was willing to go 18K on it but the owner would not budge. I suppose this property will sit for another couple of years. I will check back in with the owner in a couple of months to see if anything has changed. Until then, I will keep my eye out for other opportunities.



Bill Mitchell

Mansfield, Texas

Sep 06 '13, 09:09 PM


Originally posted by Joe Gore:
Bill,

Lets say he follower what you say and the seller say lets open escrow with $1000 and if the buyer dont then the seller will know that he is not a buyer. Honest is the best policy.

Joe Gore

You can put down $1,000 in earnest money as the wholesaler or buyer it doesnt matter, earnest money is fully refundable during the option period anyways.



Charles Kuchlenz

Multi-family Investor from Eau Claire, Wisconsin

Sep 06 '13, 09:14 PM


@Joe Gore When I contacted the owner, my initial contact was as a buyer. When the owner was not thrilled with my offer, I suggested that I might be able to find a buyer who had more resources and could probably afford to pay a little more for the property. I found one and the owner was still set on getting their initial investment back from a property that they have never even been inside of. I suppose they will continue to pay the taxes on it. Although I did see that a complaint was filed regarding the overgrowth of the landscaping.



Account Closed

Dallas, Texas

Sep 06 '13, 09:16 PM


Charles,

Did you show the seller 3 estimates from license rehabbed? If you do that the seller might take what you offer.

Joe Gore



Todd Plambeck

Real Estate Investor from Plano, Texas

Sep 07 '13, 07:06 AM


If you haven't already, I'd suggest calling all the utilities and ask what it will take to get the utilities turned back on. I'm fairly certain the gas company will require a pressure test and the electric company will require an inspection before turning he power back on after being off so long. More legitimate negotiating points to talk price reduction.



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