1 guy 9 houses

*This blog post is going to be updated as I get new information*

02/08/2016

I returned one of the calls I received Friday. I might not call the other seller back because of her responses to the questions they asked her is not showing she is motivated. Plus it's not a place I want to invest in. It could be good practice though.

I called him around 5 pm. He said he has 9 houses he wants to sell because he is old and doesn't want to do it anymore. He said he has gotten direct mail from other investors, but they never return his phone calls. Bad business. His words not mine. He gives me the addresses to 5 houses. I guess he wants to see how I behave first. He doesn't know how much the houses are worth so I emailed him CMA's. The reports were professional looking and it only took me a few minutes to do. 

Being an agent, I think it gives me an edge over a wholesaler. I'm more credible and less likely to disappear in the middle of the night. In the end, the only thing that might matter to him is the selling price. 

He wants me to make him an offer. I asked him in different ways what amount the wanted, but every time he said to make him an offer. When I follow up tomorrow, I'm going to get the rent amounts and mortgage balances. This info will help me better figure out an end goal. I'm going to explain the pros and cons of going with me vs listing it on the market. My offer will at 60% of ARV. I'll definitely ask for seller financing. Maybe I could buy a few and he finance the others. The options will be written out before I call.

02/09/2016

I spoke with the seller today. The houses are free and clear. I offered 60% of value. That was a flat out no. He said the lowest he would be able to go is 80%. He said he sold 2 other houses with an agent, but would prefer to use investors since it's quicker. Instead of all 5 houses, I can only buy one. He wants to see how I handle everything first. 

The house I will pick is worth between $137-142K. 80% gives me $27,000 in equity. Rents are $1,500. 4/2. 1775 sq ft. I have to run the numbers to see if it's a good deal for me. Maybe I could keep it as a rental or sell it.

02/13/2016

Write a business plan or a list of criteria for buying houses. The reason is because I toyed with the idea of buying the house. Looking at my business plan helped me reject his 80% offer. I crunched the numbers for a rental and the cash flow is too low. I used J Scott's rental analysis worksheet in the BP file place. A property should cash flow with property management regardless of whether you get one or not. 

My offer to him was 70% of value. That was the highest  I could go. He said he wasn't in a rush to sell and rejected the offer. I have his address, number, and email. I will continue to market to him until he becomes motivated enough to sell at my price. It's easier to walk away from a bad deal before you've bought it.