Wholesale Buying Strategy: Owner Wants More Than Property Worth

31 Replies

Originally posted by @Scott Pigman:

@Ray Eason

 @Scott Pigman

Nothing comes up while I am typing in your name.

I come from an IT background so this shouldn't be difficult :)

Is there another editor I need to be using on BP?

I'm confused why you are focused on this property.  Not much will frustrate you more in this business than trying to make an unmotivated seller motivated.  Good exercise to work through some deals, but this is not a sales job.  You need to be making lots of offers to find the ones that will say yes, not finding a house that is listed for more than its worth and somehow talking that seller into realizing they should take half that so you can make money off of them.

In fact, you are not looking for a house anyway, you are looking for a problem you can solve.  This can be repairs, a seller's financial situation, or many other things.  You can also create value by recognizing opportunity, like developing the three lots on this one, or adding square footage in high dollar areas, zoning something commercial, etc.   IMO, you should make your offer, move on, check back in later if they say no.  

Zillow is a decent thing to check, but is in no way something you can rely on. A realtor is NOT the "only" way to find values. I trust mine, but most realtors aren't that great at what they do and very few understand what we do as investors. I usually start with what the average $ per square foot in your area is and multiply that by the sq/ft of my subject, then look at sold properties near the one I'm analyzing and check out what is for sale around there. I've got MLS access, its a big help because you can see the interior pics of the recent sold comparables and such, but the other sites (Trulia, Redfin, Zillow) have enough info to have an idea what something is worth. Nothing magical about it, but there is no computer that can tell you what a house is worth. Hell, I argue with appraisers ALL the time on values and they are supposed to be the experts. I look at the Zestimate and eappraisal, and all the others, but just to see what they say against my number. You just gotta look at whats going on in the market, including how long it takes things to sell, what other houses have sold for, if there are things that make this house more valuable (views, acreage, nicely renovated, neighborhood amenities, etc) or less valuable (steep driveway, on train tracks, trashy neighbors, in a flood plain, etc.) and use some common sense on what people will pay more or less for.

Originally posted by @Darrell Shepherd:

I'm confused why you are focused on this property.  Not much will frustrate you more in this business than trying to make an unmotivated seller motivated.  Good exercise to work through some deals, but this is not a sales job.  You need to be making lots of offers to find the ones that will say yes, not finding a house that is listed for more than its worth and somehow talking that seller into realizing they should take half that so you can make money off of them.

In fact, you are not looking for a house anyway, you are looking for a problem you can solve.  This can be repairs, a seller's financial situation, or many other things.  You can also create value by recognizing opportunity, like developing the three lots on this one, or adding square footage in high dollar areas, zoning something commercial, etc.   IMO, you should make your offer, move on, check back in later if they say no.  

Zillow is a decent thing to check, but is in no way something you can rely on. A realtor is NOT the "only" way to find values. I trust mine, but most realtors aren't that great at what they do and very few understand what we do as investors. I usually start with what the average $ per square foot in your area is and multiply that by the sq/ft of my subject, then look at sold properties near the one I'm analyzing and check out what is for sale around there. I've got MLS access, its a big help because you can see the interior pics of the recent sold comparables and such, but the other sites (Trulia, Redfin, Zillow) have enough info to have an idea what something is worth. Nothing magical about it, but there is no computer that can tell you what a house is worth. Hell, I argue with appraisers ALL the time on values and they are supposed to be the experts. I look at the Zestimate and eappraisal, and all the others, but just to see what they say against my number. You just gotta look at whats going on in the market, including how long it takes things to sell, what other houses have sold for, if there are things that make this house more valuable (views, acreage, nicely renovated, neighborhood amenities, etc) or less valuable (steep driveway, on train tracks, trashy neighbors, in a flood plain, etc.) and use some common sense on what people will pay more or less for.

 @Darrel Shepherd

Darrel,

Thanks for the input and feedback. It's much appreciated.

I am only "focused" on the property because I had a question and wanted some feedback. I guess the numerous comments and replies may make it seem as though I am spending more time on this than I should but trust me, I am not.

I am a beginner in the industry and was simply looking for feedback and others opinions about this particular property and seller. I am still learning the ropes and believe that education comes in many different shapes and forms. I am simply educating myself using this particular scenario as a base.

Thanks for your response though. This is what I will use as the foundation and basis of my new career :)

Originally posted by @Ray Eason:
Originally posted by @Troy Fisher:

@Wayne Brooks   - While that may be accurate in most places, DOM might be right for where the seller is.  I agree with you however, because in the markets I'm in anything over 30days is an indication it is either 

 1 - a 2MM+ property 

 2 - it is over priced

3 - A Rehabbers Dream

 @Wayne Brooks

Whats a 2MM+ property?

 $2+ Million dollar property. 

Originally posted by @Troy Fisher:
Originally posted by @Ray Eason:
Originally posted by @Troy Fisher:

@Wayne Brooks   - While that may be accurate in most places, DOM might be right for where the seller is.  I agree with you however, because in the markets I'm in anything over 30days is an indication it is either 

 1 - a 2MM+ property 

 2 - it is over priced

3 - A Rehabbers Dream

 @Wayne Brooks

Whats a 2MM+ property?

 $2+ Million dollar property. 

 @Troy Fisher

Thanks for explaining. :)

Ray, if you are looking for help with strategy you'd be hard pressed to find any better information than that which Sean Terry will give you on his podcast. Check it out and congrats on talking with the seller!

Originally posted by @David Bateman:

Ray, if you are looking for help with strategy you'd be hard pressed to find any better information than that which Sean Terry will give you on his podcast. Check it out and congrats on talking with the seller!

@David Bateman

Thanks David. How do I find his podcast? I went to the Learn section and clicked on podcasts. What's the best way to find him?

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