So I don't know why this didn't occur to me until today but I had an epiphany. My neighbors have spleen saying they want to sell their house for over a year now. The other day we were talking again and he told me how much they owe on it but said he has a lot of work left to do on it before he sells. So it occurred to me today, why don't I try and buy it? This would accomplish a few things. Give me my first income property, potentially increase my property value and best of all, get rid of my neighbors and their annoying super loud motorcycles.
I know the house needs exterior work. Probably a new roof, and definitely siding. I have never seen the inside. I know from talking with him that he thinks his home is worth way more than it is in its current condition. So....how can I approach him? Obviously I would need to see the inside to get an idea of how much really needs to be done. Then somehow make an offer that isn't offensive and helps him not have to do any more work.
Thanks for any advice!
Solve his needs ...be his solution
Have they listed the house with a Realtor or just keep saying that they want to sell it?
If they have listed it, the Realtor should have told them what a realistic price to list it at.
To be able to give them an Offer that is not too much, you will need to have a Contractor go with you on a tour of the house. That Contractor should be able to give you an estimate for all of the remodeling needed to bring the House back to a decent condition.
Then get a Realtor or go online to get an idea what the same type of house , with the same size of yard, and the same amount of bedroom/ bathrooms are worth.
After all of this due diligence and research, you could offer him something like 60% lower than what you think it is worth. Then his counter offer might be 80% , and your counter to that could be around 70%. Most Investors try to get around a 30 discount on Houses.
The worst he could say is , No, and tell you that he will get $XXXX for his house. After it sitting on the Market for 3 months or even till Fall, you could approach him again with the same offer or something a little better.
Do you belong to a REIA that could give you some referrals for Contractors or Brokers?
Here is a link to the ones on BP for your area:
@Robert Blanchard thanks! I am a member of an REI group here in Grand Rapids so I have a good network of people I can connect with there.
My biggest problem is just trying to figure out how to first approach him and what to say or how to say it in a way where it can be a win/win. I'll have to see if he really wants to put all the money into it himself.
I find that the straightforward approach is usually best. You don't need any razzle-dazzle or magic sales techniques. Just knock on his door, and let him know that you're looking to buy a house or two as an investment. See if he would like an offer on the house. If he's willing, have a contractor come through, and give you a repair quote.
Since you live in the same neighborhood, you both probably have a good idea of what houses have sold for recently. Show him those details, the repair estimate, and make him an offer.
If he doesn't like it, no big deal. Every seller thinks their house is worth more than it is. But if he accepts, you've got a great situation, with easy access to the house.
In short, no need to overthink it. Walk over there today and talk to him. (:
Keep us updated... it's a neat story!