What was your first off-market walkthrough like?
I have my first walkthrough of an off-market house this week. It's currently vacant (has been for about 2 years) and mid-updating. 2018 photos from the last listing show subfloor and trim missing in some of the rooms and when I spoke with the current owner they mentioned they had updated countertops and removed popcorn ceilings. I'm anxious to see what else they have updated compared the old photos.
Owner mentioned they had a pipe in the kitchen freeze last winter and that they fixed it but the flooring in the dining room would need replacing because of the water damage. So water damage is something I'll definitely keep an eye out for an consider in potential offers.
It's in a great neighborhood, built in the late 80s and appears to be in good shape. I'm a little nervous but mostly excited to make real steps in REI. Lots learning and getting things set in place while I've been house hunting for my first investment.
@Lauren White Best advice I can give you is DO NOT talk any numbers with the seller. DO ask questions and try to keep the conversation about family, life, or general house questions. As an investor and buyer the best thing you can do is find the motivation, and help solve the sellers problem. There's obviously problems with the property. It's your job to determine what they want, what it's worth, and to meet somewhere in the middle. If you're lucky they'll give the first number.
As a beginner myself, can I ask you how you found the off market property?
@Jaron Walling Thanks for the advice!! Will do.
Good advice from @Jaron Walling . Almost all off-market sellers try to get a number right away, but it's never about the number, it's about the motivation. I would be asking all questions about why it's been vacant and not earning for two years and focus my questions on how you are there to find a win-win, but there's a reason it's been sitting vacant and to assume those issues, it costs a healthy haircut. Build a relationship first and always. "What are you going to do with the proceeds when we come to an agreement?" = understanding the motivation.
@Aaron Parkan Sure!
It is a vacant house in my neighborhood—knew it was vacant thanks to yard overgrowth. I found the owners through public record (I used Beacon because I knew the address but then researched the title history a little through county record searches after I had the owners names). I wrote them a letter (sent to their home address), maybe early summer, saying I was interested in talking if they wanted to sell it since it had been sitting vacation for so long. Didn't hear anything until late November when they emailed me mentioning they remembered my letter from the summer and if I was still interested they may consider selling.
So it's not a super motivated seller—based on a quick phone conversation they aren't in NEED of selling it—but after several more months of them not finishing the rehab they were at least motivated enough to reach out to me.
@Jonathan Greene Thanks for the reminder that it's about relationship building and it's true, it has been vacant for 2 years, so there has to be some reason. I suspect that reason may just be different priorities with their time but I will do my best to not make any assumptions when talking with them. Any other specific questions you often ask?
Thanks so much for sharing! Good luck on the walkthrough. Hope it all works out and you secure a great investment. Would love to hear had it all goes.
@Lauren White since I am licensed, I can ask more open-ended questions because I can always drive them to a listing if they want market price or an iBuyer if they want a cash offer higher than I would give. If you are an investor and not licensed, you want to focus on motivation first. Why do they want to sell now and where are they going or in the case of a vacant home, what they need to move forward so they stop wasting money on upkeep? Have they had other offers, are they talking to other investors, what's their timeframe, etc.
Update! Walkthrough went well. Water damage was greater than anticipated so I wasn't able to offer as much as they were hoping to get using traditional financing. Offered a lower amount traditional purchase and a higher amount if they were open to seller financing. They took the lower offer with traditional financing! Inspection was yesterday and a couple of unexpected things came up so we're working on hopefully renegotiating.