The SW Florida market is HOT! Not only are properties selling, but rentals are few and far between. Everybody including their dead uncle is now a RE investor. Competing with smart money is one thing but you can't compete with stupid money! Stupid money makes it difficult to buy anything unless you are willing to pay retail.
I have been advertising to buy houses on CL for months. During that time I received maybe 3 or 4 offers. These were generally upside down properties or so highly overpriced there was not a chance of making anything happen. I also advertise to lend money on real estate and this is where my lead came from.
Seller had unpaid property taxes and a tax deed sale was scheduled. There is also a divorce in process! Under the circumstances I told the owner I would not lend money but would purchase the house. I prepared a written offer and delivered it to the wife giving her 3 days to accept the offer. She finally accepted.
This is now rental unit #8. 3/2/2 in Cape Coral on city water and sewer. Approx living area 1400 SF. Needs minor renovation. Purchase price of 70K. Rehabbing costs of around 5K per written estimates from licensed contractors. Anticipated rent of $1000 per month (I already have a list of over 20 potential applicants). Estimated rehabbed market value is approximately 115K. A quick flip would produce a very high ROI but I am a buy and hold guy and plan on living off rentals in retirement.
Deals like this are few and far between. In 2010 there were LOTS of deals but those days are gone. I would attribute success in closing this deal on a few different factors:
1. I was NOT pushy. I gave a written offer and let the seller think it over.
2. I offered a quick closing (closed within a week of contract)
3. I offered the seller a solution....we stopped the tax deed sale, closed and got the husband out of the picture, and put money in her hands quickly.
4. I sold the lady on myself. Though I wear a t shirt with machine guns on it daily (my other business), I assured her I was a professional investor, that I honored my word, and that I was offering her a solution to her problem and would help resolve all the stress surrounding the house and her divorce. I was not present but was told that the husband was extremely nasty towards her at closing and she had tears in her eyes. Now she is free of him!
I truly felt sorry for her and hope the money will help her get back on her feet and move forward with life. Though I got a good deal I feel I helped her and help resolve major problems that would cause anyone to lose a lot of sleep, lots of stress, and make life miserable. Now I am on the hunt for #9:)
Great story. Was this from one of your postings on Craigslist or did she find you some other way?
It was from a CL posting. It is the third property I purchased from CL advertising. CL can be a valuable asset..and the price is right!
John, you deserve congratulations on this one.
Deals like this are extremely hard to find in Cape Coral today. I agree that competition for these houses is pretty fierce.
I found a great deal on a duplex a couple of weeks ago that I passed on. It seemed no one wanted it until it went to auction, where I think it went for above the listed MLS price.
HUD listings are way down in the area as well and when they do come on the market seem to be listed higher than retail.
Rentals are getting harder to find. If yours is a 3/2/2 and not in the remote far north side, the rent can be higher than $1000/mo. We are looking at smaller homes or duplexes that can that rent for a little less.
Jerry: the house is close in near Cultural Parkway and Hancock. It is on city water and sewer. I feel very confident I can get $1000 a month but may ask $1100 and see what the response is. I don't know if you remember me but you did show me a house or two a couple years back.
Congratulations. This sounds like a win-win for everyone.
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