As investors we are always looking for a good deal as that is how we grow learn and hopefully prosper.
I just logged off of the MLS feeling disgusted with myself for feeling like well, a predator. Googling an owner of property trying to find out what his/her problem/pain point is in order to garner the best deal. Then stumbling upon a Facebook , Go Fundme page or obituary of spouse or child. I do understand that being armed with the right information usually puts you in a better position to negotiate.
Just wondering if any of you ever feel this way when searching for the deal and having to dig for information and coming up with some not so pleasant circumstances people have experienced or are experiencing hence they are selling.
No , not at all. Knowledge is everything , information is key . Its business , no emotion is attached .
I do not feel that way at all. However I am usually trying to find win/win situations. If I cant make a transaction as an investor, or as an agent have everyone walking away happy, then it is a deal not worth pursuing for me. My business, both investing and as an agent is based on my reputation being impeccable. If someone is walking away from a deal unhappy, then that is going to blow back on my reputation somehow and that is not worth it to me just to make a few bucks.
As investors we really need to strive to find win/win situations. Not every last dollar counts. We can make a good honest profit while the person on the other end can still walk away feeling good and not taken advantage of.
I don't look for such information. I don't want to know why they are selling, short of something wrong with the house. It's a business transaction, and that's all it is about. I might feel that way if I was researching the owners like that, but the extent I might look at is the note on the property or how much it was purchased for, things like that. I don't look for any personal information about the seller, because I am going to throw my offer out there and if it takes, it takes, if not I have a number I am willing to do regardless of the situation.
Karen...you are in essence conducting due diligence by gathering as much information as possible. That's a smart business approach. But it won't stop some out there from referring to real estate investors as "predators". Just go on Yahoo and read articles about how rental rates have risen across the nation...to many absurdly uneducated posters in the comment sections, landlords are nothing more than mini-Gordon Gekkos.
The key question, I think, is why are you doing this. I've felt a little slimy a few times, but it usually had to with how I was approaching it. Namely, when I got a little greedy. If I look at the business as providing a service that many people in such situations find useful, then I feel fine. And of course, that comes without the pressure sales tactics, which are something that has stained our industry to one degree or another unfortunately.
@Jade S. Thank you Jade. I had to Google Gordon Gekkos as I didn't know who he was. :)
@Andrew Syrios The reason for the fact finding I guess is the same reason a lawyer will never ask you a question that they don't already know the answer to.
@Russell Brazil I agree that it should be a win for all parties involved.
Thank you all for your replies!
@Karen Bickford I had a good friend of mine that had retired ( owned car dealerships) and was board silly so he wanted something to do.. he lives in Palm springs in the winter and Broken top ( Bend Oregon in the summer) I said hey chase down some foreclosures so we can bid on them if you board..
Well he goes out day one checks a place out and the lady comes to the door.. after a short talk he gave her 200 dollars to help her.. Called me and said I give money at my church to help these folks I don't really feel right about buying their homes.. So I think I will go back to playing golf everyday.. LOL
@Karen Bickford , I have never had that problem. I try to find a way to solve a problem. If I bring value to them, then I get something in return. I have never bought a house where I feel I used an unfair advantage in negotiating a deal. I don't need business that bad. I see some pretty bad things in my line of work, and I don't need a house bad enough to take undue advantage of another person, especially if they are at a disadvantage. To the best of my knowledge no one has complained about how I bought a house from them or how much I paid. That probably cannot be said for my day job, hehe.
I think it reflects well on you that you would have that concern, @Karen Bickford . Anyone who asks herself these questions has very little chance of become Gordon Gekko ;)
I understand where you are coming from, but the point made by others here are valid as well. Buying that property, at a price that works for both of you, may be the very best thing you could do for that person - you never know. Do your research, and don't do any deal that makes you cringe. You are helping people move on to the next (maybe better) phase of their life.
Jean Bolger, 33 Zen Lane | http://www.solidrealestateadvice.com
@Jerry W. The questions begs; What is your day job?
@Jay Hinrichs Funny stuff !!
Thank you @Jean Bolger . Being a business owner, out side of Re investing I hold myself to the highest regard in doing the the right thing and with integrity. What I was feeling earlier was making me question that. My BP peers have quelled some of the voices in my head :) and I thank you all for reminding me of the fine line.
@Karen Bickford , last week I put 3 folks in prison, I think all 3 are appealing their trial or sentence. One stole a vehicle to go to court in another state, one was selling meth, and the last one sexually assaulted an old lady in an alzheimer's ward. All of them seem to feel they were treated unfairly. Some of these guys I liked better than their attorney. I am rather anxious on some days to switch over to doing rentals as a day job. When I get a new house to work on sometimes my wife calls them therapy houses.
@Jerry W. your my hero.. but those skum buckets in the klink !
@Karen Bickford , sorry, I was whining, I am a prosecuting attorney.
@Jerry W. still my hero ... .... I no its a fine line in the law.. everyone is entitled to the best defense they can afford or the state can provide..
I have friends that are criminal defense lawyers as well.. Not sure how you wrestle with all of that in your profession.
Thanks @Jay Hinrichs , sometimes you feel like the Lone Ranger.
@Jerry W. but you sleep very well at night !!!
knew it @Jerry W. You read prosecutor to me :)
I'll just throw this out:
Not every deal that meets your terms has to involve maximally screwing over a widow or divorcee.
Recently, I bought a house off the MLS that met terms, cash flowed with a 15-year. It was just a case of a motivated seller who feared being a landlord, had been burned by several offers falling through, and was willing to let the property go. He didn't make much of a profit off its sale, but didn't exactly lose money, either. Many hard-core investors would consider this property to be marginal, or not as high-performance as others. But on the positive side, I inherited it with great, stable tenants, and it subsequently appraised at 30% more than what I paid for it.
If you feel dirty prospecting for deals, then find deals another way. It just might require more patience.
I've had sensitive moments when I've learned someone was going into foreclosure and the amount owed was well out of their reach to pay, yet they weren't really trying to get a loan modification, seemed as if they didn't want the place... In the beginning I was told by many not to get too personal in this business.
I definitely don't see myself as a predator for the seller(or buyer) would have to be my prey and that's certainly not a win-win situation.
So long as you mean well with no malicious intent, you should feel fine.
You can deal with fairness and empathy without being too charitable, that's not predatory dealing.
I consider some methods of prospecting a bit objectionable, but what is your intent in following death announcements or medical judgments?
If you have good intentions, you are looking for people who may need your assistance but just don't realize it yet.
Only you really know your intentions, there is nothing wrong with profits.
You can't help people unless you have the money to do so, you can help more by being financially secure yourself. What you make from one person keeps you going and finances the next transaction to help another person.
Without social success you won't have financial success.
Without financial success you won't be in a position to contribute to society or help others.
If you feel guilty sometimes, that probably means you are not a sociopath. :)
Bill Gulley, General Real Estate Academy | https://generalrealestateacademy.com
Lots of predators in this "racket". I've interacted with a few who would make great tow truck drivers.
I would sacrifice some profit for the ability to sleep at night. On the other hand, being a sociopath is a trait that many successful people have in common.
Pizza Hut, Little Caesars, and Dominos are constantly searching for deals like predators. Commercials every 5 minutes on tv and the web. And every week their sending me those dang coupons... I don't think they feel any remorse about it.
This gives me a sense of respect/appreciation for your character. The people I have helped (even deals where I made tens of thousands of dollars) absolutely love me. They had a need that I met. I dug them out of the hole their home put them in. I typically deal with absentee owners so I'm not usually messing with primary residences.
I understand coming across info like that and feeling "dirty". But you did it the right way. If you were looking for Gofunme pages of people who lost loved ones and then trying to find their homes to buy.... I would say you suck. But you did it the other way. I wouldn't mention the info you know regarding that aspect to keep the transaction "clean".
Ryan Dossey, Call Porter | http://Callporter.com
I get quite riled up when investors are quick on the draw with the term "win win". From what I have seen, most (not all, but most) of these "win win" scenarios are really win lose, but someone is telling themselves it is win win.
I may be an oddity, but I find myself almost 50% of the time telling someone that though I can buy their property for X, they are in a better position to do Y. Might there be a way that I can pull off a referral fee or some small kick on them taking Y? Perhaps - and I consider that to be much more of a win win than getting the property at below what they should take.
I was once dragged to a presentation where some idiot bragged about his method for getting houses below value: get them under contract at full market value, write up bogus inspections showing tremendous faults with the home (that weren't necessarily even true), then drawing up fake contractor bids at 200-300% of the actual cost to repair problems that weren't even there! And he was selling this as the gold standard of how to succeed in REI. Disgusting.
There is a moral line, and we can all nudge it a little left or a little right in our own personal views. To answer your question, I would say that researching someone's sick child is certainly flirting with the line. If you were to bring it up in the discussion - I would say you've crossed it. Even still - lets look at such a hypothetical scenario: the family is in financial straights due to a very sick child. Your solution is to buy their home? Now they have money but no where to live. That really isn't the "win win" scenario. A home equity loan would be more of a win win for them. "But they have poor credit" you might say, so the banks have told them no. I still don't think buying the roof over the poor child's head so that she can get the medicine is the best win win.
Now lets look at how something like that COULD become a win win. Could you buy the home from them with a lease back and option to buy when their financial situation rights itself? Could you offer them a second position note? Could you buy the house from them at a price that gives them enough to buy a smaller place (and actually help them find another place)?
Please understand that I am not calling you a predator. I'm just saying that should you find yourself wondering if you are, perhaps you should take a few steps back from that line. I promise there are plenty of people out there (and even on here I'm sure) who love nothing more than to rush straight over the line. If you have the moral compass to get pangs of questioning, don't be one of them.
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