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Posted over 10 years ago

My First Contract - Excitement

I had originally planned to follow up my introduction blog post with some of what I am working on and what I need to work on more. We can always get to that later. Instead, let's focus on the excitement at hand. I got my first contract signed!

As exciting as that is, I have a confession. Due to what we (my mentor and I) thought might be a slightly complex set of terms, I made the call to let him basically do the paperwork and I would shadow him so to speak. I am a very hands on type person, so this may or may not have been the best approach. However, I don't plan on it to be the only deal I ever work. Actually there already is another one, but we will get to that. I figured since this was my first deal to get a contract on, I would break down how I got it and some of the numbers involved.

Getting The Lead

The lead was originally generated through my online marketing. This is currently the only form of marketing that I am doing. It is generating about 10 leads a week currently after about 3 months of setting things up. I find this to be a good number based on having spent less than $100 getting things up and running. There were a lot of man hours I put into this however.

Seller input their contact information onto my website. Due to a small amount of leads coming in each week, as soon as someone submits their information on my site, it sends me a e-mail and a text message to my phone. Being able to get back to a seller quickly is a competitive edge. If I can call back almost immediately, I figure they might stop looking for my competitions contact information.

Initial Contact

The caller was an older female and I could very quickly tell that there was motivation. I am good in conversation so we built rapport quickly. I was moving from simple conversation and building trust into trying to find out what the "pain" was when the caller started to cry. My initial thought was "this is awkward" but it was immediately followed with the idea that this might be a good opportunity to build even more trust and a relationship. I sort of talked her down a little and danced around the topic of the house but also found a common ground to discuss with her. (I was trained in sales at AT&T, so these are all basic sales techniques.) I didn't want to push the "pain" portion of things again just yet so I gathered the important information on the property. After I felt I had enough information I started to ask a few open ended questions to try and figure out what the motivation was from the seller. We finally got around to the fact that there was an issue with a family member who lived out of state and the other family member didn't have anyone to take care of them. I could hear the emotion begin to build in the sellers voice again, so I diverted the conversation away from the subject until I got off the phone.

The Numbers

ARV based on comps within 6 months (there were not many for last 90 days) and within a 2 mile radius showed the property to be around 125k. Seller had stated that they wanted 110k from the initial contact. When asked "is 110k really the least you would take for the house" the seller stated "I am not sure." Subsequent conversations with the seller and her husband would continue to show more and more motivation. The house was extremely cluttered, but really all it needed was paint and carpet. There was one door that probably needed to be replaced. For a 2005 house it was in good condition. One of the biggest downsides to the house was the neighborhood. Strangely enough 2 houses to the side there was an old abandoned house that was boarded up. However, about a block the other way were extremely nice almost 180k value homes. The street the house was on is also a crappy 1 lane road although its in the middle of the city. These were some factors we wanted to be cautious about in the price.

Our first offer was 65k. They countered at 80k. This is where we verbally structured the deal so that we would pay cash 65k and the remaining 10k as a balloon in 5 years. They seemed to be in agreement, but we asked for another day to consider it and make sure it would work for us.

As luck would have it, the next day they would call us back and say they would do it for 75k. After reviewing the neighborhood, the street the house was on, and nailing down the comps a little more, we sent the owners a contract for $68,800. They agreed. Contract signed - woohoo!

What Next?

Okay, I realize that I don't have any money in my hands yet, but this is all still progress for me. I was on cloud nine when I got confirmation they had signed and that it was being sent to the title company. My mentor and I will share profits 50/50 which is more than fair at this juncture in things. Next step is closing.

The Other Contract Deal

So as I mentioned in my introductory post, I work on an ambulance as a medic. Every other week I work 5 days that week for 12 hours a day. It's grueling and leaves little time for focusing on the business. On my "busy week" I happened to get around 5 leads early in the week. I started to work on 4 of them and was quickly getting overwhelmed. I don't really have a solid set of systems in place nor organization of things yet. So, the 5th lead which was in another neighboring city, I decided to pass on as a referral to my mentor. So, guess which one turns out to be super motivated and sign a contract in less than 2 days. Yep. Fortunately I will still get a small bit of a referral fee, but I can't lie and say there wasn't a little bit of frustration! Ohh, well. Something is better than nothing. Plus I plan on many more deals in the future.

Cheers.


Comments (8)

  1. UPDATE TIME: Yes, I am updating this post 4 months later! Gosh... I can't believe it has really been that long! The seller was a husband and wife. The initial title screen came back clear. However a day before closing we got a call stating that the husband was also married to another woman as well. Argh! Arkansas law states she has some claim to the property as well and that stopped the process in its tracks. So things were set in motion to get things resolved and they are "still in the works." At the end of the day the seller still needs to get out of the house, but I am concerned they may not be paying the mortgage at this point. 4 months of following up has moved things forward slightly but its all courts at this point and just something seemingly on the back-burner. A bummer of a situation, but it's still not a complete loss at this point. Anywho, yeah... that's that for now!


  2. Great job! Keep it up. How are you driving people to your site?


    1. blogs, multiple venues of paid advertising, blog commenting, organic results, and some other things.


    2. Cool thanks for the insight!


  3. Hey Eric Metz congrats! Let us know how this whole thing turns out! I love hearing these stories :)


    1. I definitely will!


  4. Congrats! Looks like things are starting off well. Lots of luck to you in your future endeavors.


    1. Thanks! I appreciate the boast of confidence!