Running through the brickwall
In January of this year I had a few marketing campaigns going on where I was trying to find motivated sellers. I sent out some letters and sure enough -I got some phone calls. Funny how that works;-) A seller had a property they wanted to sell and they were very vague about the answers they were giving me to my questions. I thought nothing of it and pressed on toward getting the deal under contract. I worked with a business partner who ended up getting an offer on the deal right away so we were all set -right? Yeah right! It turns out the title company discovered that this property we had under contract had a blanket mortgage for a total of 4 duplexes including the duplex we had under contract.
So, I started calling the seller to ask about this blanket mortgage and the seller explained they were about to file for bankruptcy and needed to sell their entire portfolio. The bank holding the note was a very small local bank -thank goodness. We assured the bank and the seller we could buy all four duplexes. So, we made a super low offer thinking the bank would be fine with an insanely low offer. The seller did not really care how low it was because they were told the bank would forgive the outstanding debt. That didn't happen. The bank decided at the last minute that they would only forgive a portion of the debt and wanted to do a short sale on the rest of what was owed.
To make matters worse the bank started shopping our deal to another potential investor to have him assume this outstanding blanket mortgage. You want to talk about being confused. I was dealing with a seller who works for a company who just went through a merger at the same time we put these deals under contract. It took us over a week to get the purchase agreements signed. We had the first property under contract Jan 21st of this year and we just closed out all 4 duplexes March 31st. We had to keep raising our offer until we got the entire amount of the mortgage paid off with the bank. That was still not good enough to get us to the finish line though. We actually made sure the seller who was facing bankruptcy, possibly a short sale to walking away with $1,500 in cash at closing. We were literally a few days from closing and the seller did not want to close. They kept ignoring my phone calls and it was a lot of going back and forth.
In the end, we made it. We actually managed to do back-to-back closings on all four properties where we bought and sold the deals in the very same closing. Man, I have never had to sign my names so many times since the day I went into the military! Ha! When faced with a difficult situation you just have to keep pushing. I worked that deal for over two months and only closed maybe 2 other deals in that time. Most of my days were spent working this deal. I am so thankful that God gave me the ability to see this one through. I could not have done it all by myself if it wasn't for a good mentor to have my back. If you are asking was it worth it? In the end, yes it was. At the time I was dealing with everything- maybe not, but I knew the end result was going to pay well. It was a win for our end buyers too. They could literally take these deals right now as is and make money by putting these properties on the market. Our seller walked away with cash at closing, and my business partner and I made money. That's when you know you won!
