Vacant Property spotted, Owner(s) found, Now what?

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Vacant Property spotted, Owner(s) found, Now what?

John Sherron
Houston, TX · Member since 2015 · 87 posts · 25 votes

Okay, I think I found a great potential property and I did the research and established the owners. The home looks to be vacant, the grass hasn't been cut for weeks and it looks to be about 2 feet high at this point. It looks empty but not certain about that.

My question is should be the next step? 

Before reaching out to them, should I have a figure already put together on the property and give it to them in the first letter or just contact them about my intentions?

Without knowing what the inside of the home looks like how do I come up with a realistic offer?

Any advice or other input that is essential to know in this process please advise if any. 

Thanks so much in advance BP Family! Look forward to your responses.

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John Thedford
Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
9y

First things first. You need to find out if it is for sale.  Do as much research as possible on the property before you meet the owners. When you meet, try to find out their motivation.  Once you get inside, you will have some idea of condition. If you believe the deal is worth pursuing, tell them you would like to bring them an offer. Bring it IN WRITING..using the TX RE standard "as is" contract. That is much more powerful than voicing the offer. Make your offer on your terms. Nobody has an obligation to pay more for something than they wish to pay. Make sure you have contingencies for condition. I like to ask for 7 days maximum. Once you have a professional inspection you will know if you want to move forward or not. Either way, call them. They will appreciate a yes or no answer. It is NOT difficult. If you have funds, having a copy of proof of funds handy is also an excellent selling point. I always offer that to sellers telling them that I am a BUYER and not a BS'er.  

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  • John Thedford
    Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
    9y

    What do you want to do with the property? You certainly would need to inspect it personally at the bare minimum.

    0Reply
  • John Sherron
    OP
    Houston, TX · Member since 2015 · 87 posts · 25 votes
    9y

    I would like to buy and hold this property. 

    So it sounds like I would need to contact the owners first and see if they would even be interested in selling first before I do anything else?

    So, what would be the best way to go about this?

    If they accept, what would be the proper step to take after that?

    I'm new to this so forgive all the naive questions, but its important that I learn these steps the right way because I plan to do alot of these in the upcoming months.

    Thanks for your patience and help.

    1Reply
  • John Sherron
    OP
    Houston, TX · Member since 2015 · 87 posts · 25 votes
    9y

    John Thedford, I see you're a hard money lender. I've never worked with a hard money lender before but it's an option I'm considering with my first purchase. Can you tell me what are some of your requirements with obtaining a loan for purchase and rehab cost through you?

    0Reply
  • John Thedford
    Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
    9y

    First things first. You need to find out if it is for sale.  Do as much research as possible on the property before you meet the owners. When you meet, try to find out their motivation.  Once you get inside, you will have some idea of condition. If you believe the deal is worth pursuing, tell them you would like to bring them an offer. Bring it IN WRITING..using the TX RE standard "as is" contract. That is much more powerful than voicing the offer. Make your offer on your terms. Nobody has an obligation to pay more for something than they wish to pay. Make sure you have contingencies for condition. I like to ask for 7 days maximum. Once you have a professional inspection you will know if you want to move forward or not. Either way, call them. They will appreciate a yes or no answer. It is NOT difficult. If you have funds, having a copy of proof of funds handy is also an excellent selling point. I always offer that to sellers telling them that I am a BUYER and not a BS'er.  

    5Reply
  • John Thedford
    Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
    9y

    @John Sherron

    Sorry I don't lend out of state (yet). Most HML are going to require at least 20% or more down. HML are NOT good for buy and hold properties. The rates are too high. You should definitely start talking to a mortgage company soon and start working through the mortgage process. That will help you as you move forward. BTW...you CAN ask sellers to finance. The worst they could do is decline.

    2Reply
  • John Sherron
    OP
    Houston, TX · Member since 2015 · 87 posts · 25 votes
    9y

    The home is not for sale, its not listed on the mls, my fiance is a realtor, so she pulled the info on the property for me. 

    I will have get all the documentation together for the offer and I've already gotten with a lender and I have been preapproved for a fha loan. 

    But that is my problem, the fha is a owner-occupy. Thats why I was considering private money.

    0Reply
  • John Thedford
    Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
    9y

    If abandoned it could be a great candidate for an investment. Good luck.

    0Reply
  • Account Closed
    Real Estate Investor · Shelton, WA · Member since 2013 · 369 posts · 639 votes
    9y

    @John Sherron Some folks like to submit offers upfront and see what sticks. I personally enjoy the art of negotiating. Let's say you've determined that your max offer is $60k for the house, you offer, they gladly accept. Win-win right? But what if they only wanted $45k for the house? You could've got the house for $45k and it would still be a win-win..but you didn't, because you didn't ask! Remember that "He who speaks first, loses." 

    Get them on the phone, make your intentions to buy the house clear, and then..shut up! I don't mean completely..but don't launch into your elevator pitch, don't read from the pre-made script you have. Just ask questions you need answered and let them talk about the house. For me, the most important question being "How much would you be happy with selling the house for?"  If they decline and want you to make an offer, they're probably not that motivated to sell..so make your offer and if they accept, great! If they start above your price, negotiate until you're down to it, or below. If they give you a number that's below your price, great! You got yourself a deal.


    3Reply
  • John Sherron
    OP
    Houston, TX · Member since 2015 · 87 posts · 25 votes
    9y

    Thanks for your help John it is greatly appreciated!

    0Reply
  • John Sherron
    OP
    Houston, TX · Member since 2015 · 87 posts · 25 votes
    9y

    Lloyd, good stuff! 

    So do you think I should send them a post card first or just try and get their number and contact them?

    0Reply
  • Account Closed
    Real Estate Investor · Shelton, WA · Member since 2013 · 369 posts · 639 votes
    9y
    @John Sherron

    I personally hate direct mail. If you can get ahold of them directly, do so. Use every means necessary. 

    • Search the seller's name and city in google and see if any associated phone numbers come up (i found a seller's phone number this summer listed as a reference on someone's resume). 
    • Use social media; If the seller's are older, try a website like Intelius to find younger family member to contact. 
    • Go ask the neighbors! My last flip came after all other means of communication had failed, no phone number, no response to mail, no relatives on social media.. so driving by one day..i stopped and just asked the neighbor. Sure enough, he had known the owner for 40+ years..went inside, got me her number. Which brings me to my personal favorite
    • For houses that i'm absolutely positive are abandoned..leave a bandit sign in the yard! "If you know the owner, please call me, i'd like to buy it. XXX-XXXX"  SOMEONE in that neighborhood 1. is tired of looking at that house and 2. knows how to contact the owner. 
    4Reply
  • John Sherron
    OP
    Houston, TX · Member since 2015 · 87 posts · 25 votes
    9y

    Wow, the bandit sign idea is super creative! I believe I read something about that in the past, but a super idea!

    I honestly dont know if its actually abandon, but I ride past it once a week and the grass only gets taller. 

    What if I left a postcard at the door, then called so they have a heads up on who I am?

    0Reply
  • Account Closed
    Real Estate Investor · Shelton, WA · Member since 2013 · 369 posts · 639 votes
    9y

    Post card in the door works too!

    0Reply
  • John Sherron
    OP
    Houston, TX · Member since 2015 · 87 posts · 25 votes
    9y

    Thanks a ton Lloyd. Great help!

    0Reply
  • Pratik P.
    Flipper/Rehabber · Sacramento, CA · Member since 2016 · 807 posts · 815 votes
    9y

    Looks like you got a lot of excellent advice already!  I personally use intelius to find the owner's number.  Intelius is hit or miss but it also shows you their relatives and their numbers as well.  I've gotten a hold of relatives before who got me the actual phone number of the owner.  

    1Reply
  • John Sherron
    OP
    Houston, TX · Member since 2015 · 87 posts · 25 votes
    9y

    Thats good to know! I never heard of it before today. I admit I'm a bit nervous calling folks asking if they want to sell me there house but I'm sure it will get easier the more I do it.

    Thanks!

    0Reply
  • Shay Allen
    Philadelphia, PA · Member since 2016 · 46 posts · 6 votes
    9y
    Yeah you seem very nervous from your responses, just try to relax just go with your gut , practice what your gonna say to your fiancé, dog, cat, sister, brother whoever just someone so you can get the words out that u need to say. So when the time comes you wont be as nervous
    1Reply
  • John Sherron
    OP
    Houston, TX · Member since 2015 · 87 posts · 25 votes
    9y

    Hey Shay, you could sense my nervousness too...lol.

    Yea man, my fiance is more of the talker than I am, she handles that sort of thing like nothing. Me on the other hand, the last time I made some cold calls to sellers that were actually selling their homes, I felt jittery and then I start losing my train of thought. 

    Man it was crazy, but I don't think they realized it but maybe they did but didnt react to it. But I felt completely out of focus once the nervousness set in. 

    I just hate to self sabotage myself cause of my nerves, but I have to either get over it and push forward or outsource the task. 

    Any suggestions?

    I figure I have to just do it and get over it. Wish me luck yall!

    0Reply
  • William E.
    Investor · Pearland, TX · Member since 2016 · 246 posts · 136 votes
    9y

    start with a script, then once you try it a few times, you'll fill in the gaps with fluid conversation. remember you're talking to normal people, just like yourself. they probably don't want to talk about this either, but you've reached out and given them an opportunity. You need to present it as one.

    check out the script on this page by @Michael Quarles

    and listen to this podcast

    0Reply
  • Daria B.
    Rental Property Investor · Gainesville, FL · Member since 2015 · 1k+ posts · 432 votes
    9y
    Originally posted by @Account Closed:

    @John Sherron Some folks like to submit offers upfront and see what sticks. I personally enjoy the art of negotiating. Let's say you've determined that your max offer is $60k for the house, you offer, they gladly accept. Win-win right? But what if they only wanted $45k for the house? You could've got the house for $45k and it would still be a win-win..but you didn't, because you didn't ask! Remember that "He who speaks first, loses." 

    Get them on the phone, make your intentions to buy the house clear, and then..shut up! I don't mean completely..but don't launch into your elevator pitch, don't read from the pre-made script you have. Just ask questions you need answered and let them talk about the house. For me, the most important question being "How much would you be happy with selling the house for?"  If they decline and want you to make an offer, they're probably not that motivated to sell..so make your offer and if they accept, great! If they start above your price, negotiate until you're down to it, or below. If they give you a number that's below your price, great! You got yourself a deal.

    I like your description of negotiating. One of the very first books I read was on negotiating and I found it very useful.

    Your phase "he who speaks first loses" was something I found in my reading. Not the same phase but the same meaning.

    I've never had an opportunity to ask this: what do you do if the person with whom you wish to negotiate also employs the same tactics. That would be a stale mate and nothing moves forward. How do you handle a situation like this?

    1Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    9y

    @Account Closed  sales technique tends to be individualized as in one size does not fit all.

    when I used to do this ( and I am 10 years or more removed with street level deals or belly to belly which is your point and a great one).

    I used this line a lot with great success to suss them out up front.

    I would use third party it went like this

    Mr. Seller I want to tell you about a client of mine.. and make sure ( and In talking to you I can tell you would never be like this other client)... this client had a 100k house and they wanted 150k for it.. of course who is going to pay 50k more than what its worth... I know by talking with you that you understand fair values and would not be like this other person... etc etc.. this gets the seller agreeing with you up front.

    Also NO is OK... I used this to very good results throughout my sales career.. this stunned them.. I would start my conversation with my RULES... yes Rules I would start by saying I need to go over the rules.... this set them back a little.e

    So  I would say I really only have one basic rule and that is NO is OK.. your not going to hurt me or hurt my feelings.. I had this client the other day and even though they would never sell or buy at this price they just could not say no.. so we wasted a bunch of time .. with I have to think about it. etc etc.  When in Fact if they just felt comfortable saying NO in the first place we move on to another property or another price point etc..

    YOu give them permission up front to think they are in control.... I would also say

    NO is OK and I can tell by talking to you that your straight forward and would never just say maybe or think about it I can tell you would get right to the point and if you did not like it you would simply say NO.. !!!

    when you hit folks with this they universally will say   YES THATS ME OR US.. we would defininitly tell you NO.. when in fact almost NO one will .. they all want to say maybe or think about it. 

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    2Reply
  • Shay Allen
    Philadelphia, PA · Member since 2016 · 46 posts · 6 votes
    9y

    ok well as i tell some of my clients who cant talk to woman the worse thing that can happen is that she will say no. Thats the worse thing that can happen from this, either you get the deal or you wont. Its very simple when you think about it like this. You already have the girl you are already ahead of the game. You just need extra income thats easy part. Your juat calling people to see if they are interested in selling they house not getting married. You are actually providing a service. 

    "Hey i noticed that this property on whatever street seemed vacant would you be interested in selling it?" -simple easy fast to the point

    Now all you have to do is ask questions about what they say about the prop you should barely be talking let them talk you just want to let them know you just want to buy it.

    visiualize them saying yes that they want to sell it before you call them this is key your tone and demeanor will change and they will pick up on your energy and you will already be in a place of not doing anything stupid like buying the prop for a million bucks LOL  just becuase they said yes you will still be in control becuase you saw them already saying yes.   

    This is a good starting place once you master this you will find your sweet spot. 

    1Reply
  • Karen Johnson
    Investor · AMBLER, PA · Member since 2013 · 158 posts · 98 votes
    9y
    I'm glad you started this thread. I have a property near me that I'm positive is vacant. I would love to purchase it to buy and hold. I'm also hoping for seller financing so I can *hopefully* put less than 20% down. I've been really nervous about reaching out to the owner and also dealing with a bit of analysis paralysis. I think I'm finally ready to make a move, starting with a post card. After all, the worst they can do is say no, right?
    2Reply
  • John Sherron
    OP
    Houston, TX · Member since 2015 · 87 posts · 25 votes
    9y

    William E., thanks a ton man! Great stuff there!

    2Reply
  • John Sherron
    OP
    Houston, TX · Member since 2015 · 87 posts · 25 votes
    9y

    I went to a investor training in a investor group I am apart of where we had to do some cold calls to actual sellers and that is how they told us to go about doing it Jay Hinrichs. We had to play like a third party caller that was calling for a client that was interested in the property. That wasnt bad, but I definitely have to own up to it and break through if I am going to be able to more forward. But it is an effective way of going about it. Thanks, good info!

    0Reply
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