I received a lead on a 3 family residence. It is for sale but not on the market.
The owner and I are slated to talk, in about a half hour form now. 7:45 eastern time.
I do not have any experience approaching this type of situation. What kind of questions should I be asking?
I am specifically looking for advise on what to talk about with the owner. This is the first communication.
I've walked the grounds. All seems ok. Not bad or great, just ok.
The owner is an absentee landlord
They were not successful in having the property managed by others
All the tenants were evicted or moved out three months ago.
I would ask the sellers for the following income statement, balance sheet, rent rolls, operating expenses, and repairs and maintenance for the last 3 years. Of course you need to see what price they're selling at and if there fixable at all on the price. A good question to ask is why they're selling. Do not discuss what you would pay for the property. Just tell them that you need to get the # and analyze everything. Hope this helps.
Let me know how it goes or if you need help running the #.
1. Tell me about the property (how long have you had it, etc.)
2. Why are you looking to sell?
3. What is your goal with the property (how can you provide a solution to his problem/situation)?
4. After you've talked for while, ask, "what do you think the property is worth?"
5. How did you arrive at that number?
6. What did the units rent for?
7. Are they a conversion, or built for the purpose?
8. Are the units separately metered?
9. What are your operating expenses?
10. Why didn't the property manager work out (and who was the PM company)?
11. When was the last roof/hvac/plumbing/electrical updates?
12. Other deferred maintenance?
13. Any foundation issues and/or water intrusion?
14. Is the property in a flood zone?
15. If I offered you cash with no contingencies and a quick closing, what is the best price you can offer me?
And so on. It's easier to just go with the flow of the conversation and ask questions accordingly. Some people will answer all of your questions with no prompting, others will require waterboarding before they will give any info.
Remember, the seller is probably even more nervous than you are, so don't sweat it too much. Above all else, just be yourself and you will come across much more genuine than if you are trying to memorize a script. Don't worry about forgetting to ask something, just make sure to get the seller's phone and email address and you can always follow up later.
Thanks for the advice @Owen D. @Peter MacKercher
I spoke with the owner, it was hard to get any words in. @Peter MacKercher , you nailed it when you stated "Remember, the seller is probably even more nervous than you are, so don't sweat it too much."
No numbers were given, only the history of the house and why it stands as is now.
However, most of the questions you listed, were answered with out any input from me.
The house has been in the family for a very long time. It became obvious that they are reluctant to sell it due to emotional attachments.
It was rented successfully for years when the family was there, occupying at least one floor. As soon as the last family member left, it all went down hill.
So it was left that neither of us are in a hurry, even though I really am if the price is right. I watched my father loose a great deal because "no one was in a hurry". Its a different story when someone walks in with a cash offer.
She will talk to the other owner and let me know what they think for a price. I offered to talk about anything from a straight purchase, to management of the property and open to any other discussion.
So I'm thinking I follow up shortly after the new year as the discussions with the other owner will not happen until then.
It seems they have some figuring out to do with the family right now.
As I'm writing, I realize I was actually a little discouraged to be dealing with so much emotion. Probably one of the benefits of working through an agent.
Yes it can be a little emocional without going through a 3 party. But that why you should make more handling it your self. I personally like handling everything i guess thats why i'm a realtor.
I would not wait till the new year. I will follow up on monday or tuesday and the week following that.
Thanks for the update. Did you get the #'s?
I tend to agree that I should drop a line before new years. I do however need to figure out if and how I can come up with some money before I push too hard.
I did not get any numbers.
I'm not too concerned with what it will rent for and actually I am confident that the property will bring $2200/month, with the potential for more depending on updates. I pay fairly close attention to the area as I currently have a 3 family only a few blocks away.
On my follow up call I will push harder for some numbers.
One question especially now that you know a little about the situation.
"In an ideal world what would you like to happen today?" ( or Happen with the property)
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.