Hello Bigger Pocket Family,
Please Help & Thanks in advance for your feedback and suggestions!
I stumbled upon a distressed property and sent the famous Yellow Letter to the owner of the Trust asking to be contacted via phone. Well, the owner is computer savvy and sent me a message via Facebook asking me to "Make an Offer".
I am ecstatic that the owner reached out to me. My dilemma is I do not want to be the first to mention a number...as the old adage goes "the first person to mention a number is probably gonna regret it? This would be my very first wholesale deal and I want to get this property under contract
My questions are 1) How do I address the owner in a sensitive manner since this is an inheritance property? 2) What questions should I ask via email prior to making an offer? Since I have only seen the exterior and it looks good; however, I have not seen the interior so I do not know what to expect. The property was built in the late sixties probably needs some updating. I think perhaps, I should estimate for All repairs to be on the safe side contingent upon an inspection.
My email to the owner would go something like this...
Thanks for responding to my request to purchase the home in .... that's been in your family for quite sometime. I have a couple of questions prior to submitting an offer.
I would welcome the opportunity to speak with you briefly, if that's okay with you. Can you please give me a call today. I may be reached at (561 ... I look forward to hearing from you.
@Michelle Joiner, no need to over think your response. I would suggest being brief and to the point. Let them know that you will need to inspect the inside of the property before making an offer. If they don't let you do this, then they really are not a motivated seller.
In terms of making the first offer, I don't see this as a big deal. A lot of the times they insist you make the first offer. I usual preface it by saying I'm basing it on my repairs estimates and a profit margin for myself then provide them the offer (essentially letting them know I'm not trying to low ball, simply a numbers game). I don't need to get them at their lowest price. I just need to purchase it at a price that will give me my desired rate of return, if they want higher than that, I simply walk away from the deal.
Also, I would suggest not patronizing them about the deceased or that it has been in their family... they know you are trying to make money and they want to sell it as well.
Hope this helps.
@Michelle Joiner The owner is not motivated. He is willing to sell (or is just curious) but does not want to sell. Do you see the distinction?
Use this as an exercise anyway. First, if he won't give his phone number he is super unmotivated. Ask for his number or ask him to call you to answer some questions about the house. When you talk with him tell him, "I am a cash buyer. I don't make offers, I buy houses people are selling at a price I can pay. What are you asking for the house?"
If he demands an offer then pull up the lowest possible comps in the area. Tell him to understand that you haven't seen the property yet, but by looking at the numbers and activity in that area then you can make him an offer around X. (X being one of the lower or lowest comps in that area) If he agrees that an offer around that amount is fair then set up a time to meet with him. Once you go to see the property just start deducting repairs and other things to bring your offer price even lower.
I will be brief and to the point and let the owner know that I imust be allowed to inspect the property prior to making an offer. I will not make mention of a deceased family member. Thanks for your input!
I'd tell him you have to see the property to make an offer. You really can't put in an offer without estimating repairs. Meet in person and then ask him what his lowest price is.
In my letter to the seller, my phone number was listed. As you mentioned, the seller may not be motivated. I will ask the seller how much she wants for the home and remind her that " I am a cash buyer looking to buy the house at a price I can pay. "
I have gathered comps for the area & if the seller refuses to allow me to see the property; I will make an offer based on the lowest of the comps. The property is in a very desirable area.
I shall insist that we meet-up to see the property; however, if the seller refuses. I will make offer based on lowest comps in area like Jake mentioned. Thanks!
Are you looking to wholesale this? if so ask a few of the local cash buyers in the area what price would be attractive to them in the specific area with the specifics of the property (sq/ft, year built, beds, baths etc) add to that your assignment fee, and that should be your offer, regardless of the comps. I would do this straight and to the point and over the phone or even email. Why would you drive all the way to the property if seller is unrealistic or supper unmotivated?
Here would be my response in this case.
Great, what is the best time to call this Friday, 10am or 2pm?
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
Join the Largest Real Estate Investing Community
Basic membership is free, forever.