Case Study: How I Snagged a Great Deal in a Competitive Market

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Case studies are one of my favorite ways to learn in real estate, they provide not only invaluable information but real world examples.

For this reason I would like to share one of my past closings, from lead generation to closing, with the BP community. I feel it would be a great way to give back and help others along on their journey.

The Dallas-Fort Worth market is notoriously competitive right now, but with the right strategies you can still find deals out there believe it or not. This particular case study will revolve around a lead that I generated through direct mail.

Lead Generation:

Let’s begin where every potential deal first originates. In my business I send out a large volume of postcards every month.  To help target and filter the list as much as possible I select properties that have a deed date of 15+ years as a rough approximation of equity. In addition, you should look for certain number of bed baths garage (preferably 3/2/2) and a square footage range you are after.

Once you are confident the houses have equity its time to look for some “red flags”. Red flags in this case refer to situations where there may be some degree of motivation, or reason for the homeowner(s) to sell the property at a discount.  Common categories that may have red flags include absentee owners, probates and code violations and many others.  This particular lead came from my absentee owners list. Looking back over my records, they had already received mail from me FOUR TIMES before they decided to give me a call.

RelatedLead Generation: What Makes you Different Can Make you Rich

The Marketing Piece

I will go ahead and share my super secret magic bullet that brought me this lead, my special unique lead generating postcard…

Just kidding, there are no magic bullets in this business.

First Contact

In this case the daughter of the home owners decided to contact me late at night via the contact form on my website. It is important to have conveniences such as this in place and allow multiple avenues for people to contact you. Obviously she didn’t want to call me at 10:30 PM on a Saturday (nor would I want to take this call); however, sending a mail through a contact form she had no problems with. Some sellers prefer to maintain communication solely through email.

RelatedSpeaking with Sellers: A Script for Success

Sellers Situation

At one time this house had been beautiful, but it was still in a very desirable subdivision. The house was a 3/2/2 brick exterior and over 2,000 sq ft. The daughter of the parents who owned the house had contacted me. However, the only living parent left had dementia and had to live in an assisted living center. These problems had been ongoing and it had only been recently the home owner had left to a facility. As a result, during the many years when the owners health declined, the house had not been taken care of resulting in multiple repair issues.

Appointment:

When I go on an appointment the property itself is the last thing on my mind. I make it a point to build a relationship as best as possible. I talk to them about anything, what it was like living at the house as a kid, pets etc. I very rarely bring up the house itself.

Contract & Closing:

As you will discover once you do this enough, not everything goes as planned during closing. Several title issues sprung up unexpectedly. It turns out the other parent who had since passed was still on title. As a result there was no will to go through the probate process. When there is no probated will you must complete heirship affidavits (people who have an interest in the property) AND disinterested parties (people who have no interest in the property but knew the home owners for example a family friend, neighbor etc.)

We ended up having to amend the contract to push closing further out as a result but everything ended up working out just fine. I suggest setting the closing date further out than you anticipate. Explain to the seller its always easy to close earlier (if this allowed and stipulated in the contract), rather than pushing the closing date back.

Let me know if you have any questions or anything you would like to see in particular for future blog posts. If you only leave with one thing remember the key with advertising is being consistent.

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About Author

Chris discovered his passion for real estate early on working for a land developer. In addition to flipping houses, Chris operates as a licensed Realtor in the Dallas Fort Worth metroplex.

9 Comments

  1. Hey Chris! Did a paragraph or two get left out or something? You went straight from the appointment to closing – nothing about the negotiations or contract at all. Speaking solely for myself, that is probably the most interesting part of any case study :)

    Thanks for sharing!

    • Chris Feltus

      Hey Sharon,

      Thanks for reading. Actually the contract and negotiations were pretty standard. I set closing one month out and closed earlier, standard all cash offer on the contract with no contingencies. If you would like, and think it would benefit other readers, I would be happy to revise the post and include more information.

      Thanks!

      • No, I’m not suggesting that. I just sincerely thought something might have been left out. I’m a numbers gal, so I do enjoy seeing those things. I know coming to the “magic” number that you offer a seller has involves many different variables – I just would have enjoyed seeing how you arrive to that point is all. Take care.

    • Chris Feltus

      When you pull your data no matter if you are using a list provider (such as list source) or pulling directly from the central appraisal district, deed date should be an option. List providers may have something that’s a bit more advanced to gauge equity. Deed date is a rough approximation.

  2. Chris, how do you convince the seller to sell below market? This is always a mystery for me. If I were selling I would run the comps, found the repair costs, and sold for no less than the difference between comps and repairs.
    Why do people sell for less than that?

    • Chris Feltus

      I don’t try to “convince” them. As I said in the blog post its critically important that the house has a red flag variable, giving the seller(s) a reason to sell it at a discount. Whether that reason is the house has been sitting vacant for 3 years, they need to settle an estate or they are a burnt out landlord. I am always very honest with people, I will tell them point blank if it makes more sense given their situation to list the property with a realtor rather than sell it at a discount for cash.

      I try and educate them as well. I walk them through what the actual costs and profits would be if they were to do all the work on the house, pay for repairs, closing costs, realtor fees, holding costs and what they could expect to net. I compare that number to what I can offer today “as is” for cash.

  3. Hi Chris,
    Yes, I’ve found that the market is tight. A few of the leads I’ve found on the probate list have been rehabbed and listed almost right away.
    I’m just getting back into the Real Estate investment scenario after quite a few years out. Things have changed quite a bit. I’ve done rentals, new builds and a few rehabs while working full time. Now retired, I’m getting back into the game. Your advice has opened a few doors for me.
    Thanks for all of it.
    Tom Moreau

  4. Hi Chris,
    Here in Phx AZ it’s very competitive as well. In fact, I’m usually competing against 3 or 4 others for every lead that calls me. Meaning, they have 3 or 4 other postcards from investors and they want to call each of them to get the best price they can. Besides trying to build rapport, what other ways can you deal with such a situation, in your experience?
    Gary

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