I did some driving around an area I am interested in purchasing in. I found some distressed properties and hunted down the owners from the local city government. These properties are coming under fire from the Department of Code Enforcement. I would really like to to buy one of these properties with a 203k loan and live in it. I am contemplating my letter that I am going to write to the owners and what angle to take. Here are my ideas:
1. Take the typical "let me take this off your hands" approach. Tell them I am interested in their property, tell them it isnt in good shape, that they are under fire from DCE, etc. Kinda make the reality of the situation sink in, and then offer a price to purchase contingent upon inspection. This price will he high enough to get their interest and allow an inspection, but wouldn't dream of committing to it as it would be well over what it is actually worth.
2. Take an "I'm a first time home buyer, and I think your property is beautiful and has a lot of potential" route. I don't feel bad about playing this card because it is all true. I am a 1st time buyer, I want to live in it, and I think it has potential. Hey if its in a nice neighborhood with great resell potential... bonus bonus.
Well tell me what you think. From what I could find out about the owners, they are older (65+) and seem to be well to do. They only took out a $50k mortgage on it about 5 - 10 years ago, and paid it off a few years later.
@Dave G. , my experience has shown me that an honest approach is best. Tell them you are a first time homeowner, and that you think their house has a lot of potential. That if they are ever thinking about selling, you would love to talk to them. Highlight the amount of money they can save on real estate agent fees if they sell directly to you. Remind them that they do not need an agent to sell their house. (A lot of people don't know that.)
Give them every possible way to contact you at the end of the letter.
I would not mention a price you are willing to pay, because to come back after inspection and give them a significantly lower price may seem like a bait-and-switch and they could walk away.
As far as the DCE, you could say something along the lines of "during my research into your property, I noticed code violations XXX" or whatever your research showed. Tell them you would be willing to purchase the property as-is.
I would highlight the fact that you are buying it to live in it. Many older homeowners are extremely attached to their homes, and for a young person to come in and want to live there may swing them in your direction, rather than that of an investor who tells them how bad their house is in an effort to purchase at a steep discount.
I have a friend who won a bidding war because she wrote a letter and included a picture of her dog.
Thanks Mindy. That is the reassurance I wanted. I definitely will do the sincere approach. I didnt think about it coming across as rude when I'm devaluing their home in my letter. Now to craft the letter.
Thanks for the input!
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