Hello all! I'm new to this game, and trying to find my first deal. I live about an hour and half away from Spokane Washington, the most ideal place in my area to flip. My plan is to buy a rundown home off-list via direct mail and driving for dollars. I went last weekend knocking on doors of less than desirable properties in Spokane. I was able to find a house that is very ideal in my opinion. It is in one of the best neighborhoods in Spokane, and it looks like it has been vacant for years, the siding is falling off, overgrown, etc,. Not only this, but the owners have missed property tax for the past three years. They own it fully, and bought it years ago for less than half of its current assessed value. The home the owners currently reside at had half of property tax unpaid this last year as well.
So my question for you, the bigger pockets community, is how do I approach the owners? I am 18, inexperienced, and generally have no real credibility to offer compared to competition. I don't want to offend them by shoving the property tax issue in their face or criticize their house too heavily, however, to bring them to terms of their need, I feel like I need to bring it up in a non-threatening way?
My plan is to send a personally written letter to their primary address, and dig up their home phone via yellow-pages after the letter is delivered. (they are retirement age, so a landline should work well) My approach in both the letter, and during the phone call are critical. Does anyone have advice on the correct things to say and write given the situation of both the owner and myself?
I've been investing in Spokane since 07' and have purchased quite a few tax foreclosure properties. I commend you for your ambitious and tenacity because door knocking is something 99.9% of the population would never even have the guts to do, let alone, execute on.
My suggestion would be to just portray yourself as a friendly neighborhood chap who's looking to purchase a property in their area. That simple.
When I'm door knocking I generally don't bring up the tax issues because I find that it can tend to put the seller on the defensive and degrade the conversation and trust with them.
The ideal frame of interaction is just a simple transaction between a buyer and a seller. If you, as the buyer, can help them by closing quickly and buying in as-is condition, well then, all the better for them and you're more likely to close the deal.
If you put yourself in their position then you can imagine that they're hopeful that, regardless of their current circumstances, they'll be able to sell for top dollar. So the ideal buyer in their mind and the person they're looking to talk with about selling is someone willing to pay top dollar for their home. Now, the person who's willing to pay top dollar isn't the sharky investor who's talking to them because he knows they're in a tough financial spot, but is the buyer who loves THIS particular house, sees its potential and will be a live-in occupant or contractor looking for a bit of a project to earn sweat equity on. If you play that "part", you'll get the deal.
Their situation only gives you a higher chance of buying the house and scoring a deal during negotiations around price, but it isn't something that guarantees a deal and it isn't something to focus the conversation with the seller around. It can however, be used to inspire urgency and illicit emotional motivation, which you can subtly use in your favor during the negotiations process.
"Hey my name's Hayden, I know this is kinda random, but I saw your place over there on __ St and I was wondering if you might entertain an offer on it?" I just got some new funding put together, don't really like paying realtor fees and I'm looking to buy a house like that one, in that area..."
Your letter should state something similar, but a phone call is always more effective.
Best of luck!
If you'd like help structuring this deal, or buying one of our wholesale fixers, we've been wholesaling in town since I began and I love talking shop with anyone who'll listen ;-P
@Account Closed Have you looked at the listing of things that didn't sell at the auction you could purchase outright for the price of the back taxes without any competition? That's something that may afford you some decent properties, then again participating in the auction is a great way to get properties as long as you set your ceiling and stick to it. If you are doing a pre tax sale acquisition then you may have some surprises come up just not the taxes. Also, if you do a title search and the property owner does not bite you have spent money on something you cannot do anything with. Going to the recorder's will give you any liens against the property, not just taxes so you know what you are up against and will know how to approach the property owner. Having them sign over a quit claim deed for the right amount of cash will usually do it. If that is the case and they do sign a quit claim deed, notarized of course, over to you make sure you are prepared to pay the existing delinquencies. I am of course assuming from your previous statement that the delinquent taxes will be the best approach. Keep us posted.
Sending you a script that is good for door-knocking and phone conversations. It's important to build rapport and *listen*. The script is just a guideline, you're there to listen and to offer a no-hassle solution because you want to buy a house in that area and you'll buy as-is and save them the hassle of showing the house to others and paying realtor and other closing costs - you'll pay all of it.
@Account Closed Do you have funding in place? Might show that you're serious if you mention that you have money to close.
@Account Closed Just say something simple like "I see you own a vacant property at 123 xyz st. have you thought about selling it?" I would not waste my time with a letter. I would just call.
Think in advance some of the objection you might get and be ready to answer. I don't own it any more. It was my fathers and we never switched the title, I have given up on that place, I lost if for taxes. I declared bankruptcy so I don't one it.