Investor · Atlanta & California · Member since 2023 · 24 posts · 14 votes
Hey there BP Peeps ~
I put a call out to my Attorney friends in the industry BUT. . .
I figured I'd put this question out there to the community as well, as I'm waiting for a response.
Without disclosing property details or location at this time, I've been communicating with a seller that seems very motivated to sell. However, he's had a few offers from investors/wholesalers that fell through, so he is refusing to lock up the contract UNLESS & UNTIL we view the property in person and make our best offer. If he likes the offer and we can close in 30 or less days, we have a deal.
QUESTIONS:
1. How do we protect ourselves in this scenario if we do a JV?
2. IF there is a Quitclaim Deed (not yet verified if title is free and clear) will this hinder our progress?
3. Seller will not budge on asking price, even with the best negotiation tactics. Now what?
BTW. . .This is a "Fire Sale," and we are interested in pursuing if it's worth our time and efforts. Thoughts???
I would appreciate your weigh in on this please and thank you!
Seems a bit suspect. My first answer to all of your questions is and always will be simple: wait to hear back from your attorney.
That said:
1.1. Make sure your DD is 100% concrete; don't let a seller rush you through this process. Conduct your pre-offer due diligence before putting an offer in writing. It sounds like the seller won't agree to any sort of flexible terms. Make your offer conditional on due diligence and contingency clauses which fit your needs. Be prepared to walk away if the seller doesn't agree. 30 days is more than enough to do this entire process but you might benefit from some support from a few fronts: your attorney, agent/broker if you're using one and a consultant/advisor.
1.2. Just make sure the terms in the JV are clear: responsibilities, terms for profit taking, exit strategy if applicable, etc. Let your attorney write this up.
2. The quitclaim deed itself isn't the problem, although it can cause a bit of turbulence; it's the fact that the seller isn't disclosing it. They're usually used if a property has been gifted. It's likely illegal not to disclose if there is a quitclaim deed before sale but I think this varies by state. It won't hinder your progress but if you run into this problem, you should either protect yourself of back away. Buy title insurance if you're unsure.
3.1. Figure out what the property is worth and make that your absolute best offer. My formula is as follows: if it meets your intrinsic value criteria, your offer should not be more than relative value. After which, an offer price less than either of those two values is your consumer surplus. This is a win. Your agent/broker can do a relative valuation; your advisor/consultant can do both.
3.2. I'm never too bothered by how firm an asking price is; the seller could just be blowing smoke for all you know. If the seller's price is legitimately firm and it's a good deal, who cares? If it's not a good deal, figure out your offer (above) and make that your proposal. Worst thing the seller can say is no.
Hope this helps. Send me a message if you want to chat.
Investor · Atlanta & California · Member since 2023 · 24 posts · 14 votes
2y
Hi @Jude Campbell ~ Thank you so very much for your prompt and very thorough and thoughtful response.
I agree with you ~ it does seem quite suspect, and the seller is very inflexible at this point, so I will certainly do my due diligence. I'm not using an agent/broker, as we would be wholesaling the subject property.
I will take into consideration everything you outlined in such great detail. This is very helpful information, and I will be in touch should I have additional questions/concerns. I appreciate your willingness to offer your support and sound advice.