Moving forward! But uh.....

8 Replies

Hi guys!

I thought I would tell y'all step by step what I am going through on a fairly consistent basis, to potentially get your input. So, I've think I have found the niche I want to go into as far as wholesaling is concerned, and that's Probate estates. I'm believing there may be a higher profit margin for someone in my position and to me, it is a little more personal.

I have begun compiling my list of investors and have talked to several really nice and warm people and really look forward to working with them. I have even talked to an investor who has allowed me to tag on an extra 1000 to a property he has in my area if I find a buyer for him. (YAY!) Things are starting to come together for me and I am excited about the steps I'm taking.

With that being said, I am contemplating what to say to the probate administrators and attorneys. Mind you, I understand they have been through a lot and don't want to come off as opportunistic. I really want them to understand that while I want to offer cash to them to take the property off their hands, I also need to win in this situation. 

So in these instances am I wrong for low balling offers? For instance a property I am looking at is 3bd 3ba, 2960 sqft, on a 3.92 acre lot in great condition. The property in my opinion is worth 200,000 plus but for what has been selling as of late we are looking more the lines of 170,000. and at 60% that brings the price to 102,000. WOULD I BE WRONG to offer 85,000??? Is this offer borderline offensive????

Honesty is the best policy!

@Shannon Webb While you can throw hundreds of offers out and hope that something sticks to the wall, it rarely does and there is a time cost to you, to the listing agents, and to the sellers.  If you get a reputation for wasting everybody's time, nobody is going to want to work with you. Not to mention you don't want to waste your own time.  

Put your best offer out there, especially on listed deals that are competitive.  If it is a deal at $102K, then offer that.

@Larry T.

 I totally understand what you are saying, but where would my cut go in? I want to be fair to myself too.

@Larry T.

 I also want to mention that my model isn't to go through agents at all. Just me, the potential seller and the investor. Does that make a difference in how I should approach it?

Originally posted by @Shannon Webb :

@Larry T.

 I also want to mention that my model isn't to go through agents at all. Just me, the potential seller and the investor. Does that make a difference in how I should approach it?

 Ah, ok, that is different then. The one problem with starting too low when you do the deal at a much higher price is that you can come across as not having been fair if you then come way up on your price.

I'm a little unclear on what the price to your buyer would be in your example.  It sounds like you'd be looking for a huge cut.  You wouldn't want to pass up the deal if your cut was much smaller but worth your time. 

If you can't get them to give you a price first, I'd offer something reasonably close to what would work for you. People find offers even 10% below market offensive, so I wouldn't worry about that. You can just explain that you know their house is worth more but this is what works for you.  

@Larry T

I would offer it to my buyer at 102k. That would be the best deal. I guess I was looking to profit off such an amazing deal myself. I know that my cut would get compromised when I have to negotiate with the seller, but what I'm really trying to figure out is how to negotiate a fair price so that everyone wins?

so, basically you are looking to buy a house that is worth a potential $170,000 for $85,000. i think the seller would see that as insulting. i understand that if you quickly wholesale it, you stand to make a good amount of money with minimal effort, which is the name of the game, but you also have to look at it from the sellers stand point. they want to walk away from the table with money in their hand too. loosing 50% on the deal is not what they are looking to do. 

i would offer the $102,000. its a big drop in the amount the sellers would like to get, but lets face it, a " motivated" seller has to understand there is a price for a quick sale. offer the house to your buyer at a decent price to them as well as making a little cash yourself. if you offer it to your buyer for $122,000, you walk away with $20,000 and they still get a house at a $50,000 deduction. everyone walks away happy

don't be afraid to offer lower than asking price, but don't come across as greedy either

@Mark Elliott

Exactly! I am still getting a feel for the type of spreads that would be considered good deals for a buyer. Like i said, I still would have to a walk-through of the property to see whats going on with the house, but I figured with 60% discount that would lessen the blow of potential repairs. That's why I figured 102,000 would be a good investor's deal. 

But then that's why I'm asking about the seller's side of it. I have seen a lot of cash sales in the area going for 50K some are comparable, some are not. But I don't want to be the person offering a bad deal to the seller just to make a profit.

What it seems to me is that you are suggesting that my sweet spot would be between 100K and 120K, which is where my possible gains from the deal will come from. For instance if I offer the seller 105K and to give the better deal to my buyer, I offer him 115K, I will make the deal sweeter for both ends, netting a profit of 10K....

I'm not against sacrificing for the betterment of everyone, I just want to make sure my brand isn't compromised while trying to be fair to myself as well. 

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