Rental Property Investor · Shippensburg, PA · Member since 2019 · 18 posts · 8 votes
There's a specific off-market duplex in my area that I'd like to buy. I've been hitting the owners with direct mail for a few months now. I was considering sending them a few offers without even seeing the inside of the property, but I'd like to find out some more information before doing so. Would I be overstepping my bounds to ask the current tenants about the house and owner? As an investor, would it irritate you if someone was interviewing your tenants about your property?
Rental Property Investor · Bloomington, MN · Member since 2019 · 404 posts · 542 votes
5y
@Noah Dunlap Yes, that would irritate me. This seems to be crossing a line. I know people are shocked to hear this, but many real estate investors like the properties they own and do not want to sell them for 40% of what they’re worth. Maybe they don’t even want to sell for 100%, but people that send letters don’t offer 100%.
Rental Property Investor · Bloomington, MN · Member since 2019 · 404 posts · 542 votes
5y
@Noah Dunlap Yes, that would irritate me. This seems to be crossing a line. I know people are shocked to hear this, but many real estate investors like the properties they own and do not want to sell them for 40% of what they’re worth. Maybe they don’t even want to sell for 100%, but people that send letters don’t offer 100%.
Cincinnati, OH · Member since 2020 · 4k+ posts · 3k+ votes
5y
@Noah Dunlap, I would be very upset if my tenants informed me someone was asking all about the property. I think the tenants would be annoyed as well.
What is the condition of the property? Is it about to fall over, where you can tell the owner does not have the money to handle the deferred maintenance? Is it turnkey, and well maintained, showing the owner as adequate funds and cash flow to keep it up?
There are a few things, a) if direct mail is not getting a call back, call them. You can dig up almost anyone's phone number online. If you really can't find it, then I would say asking the tenants for the owner's contact info is fine, but I wouldn't be asking more of the tenants than that. B) the owner is clearly not a motivated seller, or they would have replied already. Again, placing a phone call will actually open up the lines of communication more than unanswered letters C) to motivate an investor who does not want to sell, to become a seller it typically only takes one thing: a really high purchase price.
It is a seller's market, and most owners know that. If it is falling over, you might make the case that deferred maintenance costs a lot more in the long run if not handled, so they run the risk of having less and less value in the property each year. If it is in good condition, than you are likely going to be overpaying relative to cash flow, since you need to motivate a happy owner to become a seller.
Rental Property Investor · Shippensburg, PA · Member since 2019 · 18 posts · 8 votes
5y
@Corey Hawkinson I appreciate your input. What would you suggest as far as marketing to them? I am willing to pay 100% (if not more) because my wife and I will house hack it, and that will save us more money than buying a single family house for us to move in to.
Rental Property Investor · Shippensburg, PA · Member since 2019 · 18 posts · 8 votes
5y
@Theresa Harris I understand that. I've been trying my best to write them a very short, concise and individualized letter so as to stand out from other mailers they've potentially received.
Investor · Ontario · Member since 2015 · 486 posts · 250 votes
5y
Hey @Noah Dunlap I see a clause on many house listings something along the lines of "please don't approach tenants". This is stepping over a line best to not do this.
Rental Property Investor · Shippensburg, PA · Member since 2019 · 18 posts · 8 votes
5y
@Evan Polaski thank you for your advice. The house is in good condition and I'm willing to pay full price for it since my wife and I will end up buying a single family house to get more room for our growing family otherwise. But it's very tricky for me to assign it a value because just about every other multi unit house in this area is a 1900-1950 build and is within the town limits. This particular duplex is outside of town on a 3/4 acre lot and was built in 1979. The current owners purchased it in 2012 for $160,000 and our local market has appreciated about 22-24% since then. It's also a brick rancher duplex (which is rare in this area) and I'm not sure if I should compare comps of single family brick ranchers, or not.
I do have the owner's phone number (via Whitepages), I just wasn't sure if it would be a good idea to use it.
Rental Property Investor · Bloomington, MN · Member since 2019 · 404 posts · 542 votes
5y
@Noah Dunlap For sure use the owner’s phone number over contacting tenants. I get texts frequently from people looking to buy one of my properties. Nothing wrong with that.
Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
5y
@Noah Dunlap you want to talk to the current tenants, so you can gain inside knowledge about the property to convince an owner to sell? Your end goal is displacing one of those tenants, so you can move in and house hack. Just to summarize, it is not for sale and the tenants are not wanting to move. How are you helping anyone but yourself?
Rental Property Investor · Shippensburg, PA · Member since 2019 · 18 posts · 8 votes
5y
@Joe Splitrock I know someone who lives two houses down from the duplex and personally knows the couple who has been living in the one side for many years, and I would only have talked to them through my contact's introduction. The other side seems to turn over much more frequently, according to my source. Yes, I would be displacing the shorter tenured tenant, but what's wrong with that? Are you insinuating that only vacant houses should be house hacked? Also, I would be helping the owner to cash out and get full market value without the hassle of listing (if they decide to sell).
For the record, I will be taking everyone's advice to NOT discuss the property with the tenants.
Rental Property Investor · Indianapolis, IN · Member since 2020 · 562 posts · 554 votes
5y
@Noah Dunlap
Continuing to pound someone who doesn’t want to sell is a waste of your time and theirs. Maybe make one last attempt with a friendly phone call, then move on. Or just move on. There are always other opportunities out there!! Don’t get locked in on just one.
@Joe Splitrock I know someone who lives two houses down from the duplex and personally knows the couple who has been living in the one side for many years, and I would only have talked to them through my contact's introduction. The other side seems to turn over much more frequently, according to my source. Yes, I would be displacing the shorter tenured tenant, but what's wrong with that? Are you insinuating that only vacant houses should be house hacked? Also, I would be helping the owner to cash out and get full market value without the hassle of listing (if they decide to sell).
For the record, I will be taking everyone's advice to NOT discuss the property with the tenants.
It is definitely better if you can find a vacant unit. Why would you want to throw someone out of their home? I sold a duplex and had two offers. The higher offer was a family that wanted to displace one of my tenants. It was only a thousand dollars, so I took the lower investor offer. It was less hassle and the tenant got to keep their home.
If the owner wanted to sell, they could list it on the MLS, which would open the sale to multiple bidders. That generally gets higher value. If they want to sell, they can respond to your inquiries. If they don't respond, it means they are not interested. Not everyone wants to cash out. I get hounded all the time to sell my properties and I am not interested.
All I was trying to say is consider how or if you are helping people, not just what you want.
Rental Property Investor · Shippensburg, PA · Member since 2019 · 18 posts · 8 votes
5y
@Joe Splitrock I agree it is best to buy one with vacancy, and I would have done the same as you did in your situation. However, I live in a small market, and I can't afford to cut a minimum of 2/3 of the small multi family houses out of my search.
Yes, the owner could reach out to me, but my fear is that my letters go straight in the trash because a lot of investors think that everyone is looking to low ball them. That is why I've been trying to think of alternative ways to get my name out there.
Having said that, I do respect your opinion and thank you for your comments.
Investor · New York City, NY · Member since 2014 · 289 posts · 374 votes
5y
Do not do this. I get very irritated with continuous mailers and texts and phone calls all from the same people. If I ever decide to sell, it will not be to someone who has annoyed the piss out of me for years. You may need to accept that you aren't getting this property.
Investor · Worcester, MA · Member since 2020 · 1k+ posts · 1k+ votes
5y
@Noah Dunlap - If there is a specific off market duplex that you are targeting and see true value in, I agree with everyone here and a phone call would be the best approach. But you need to call this person with a plan. First a foremost, you have to work to create a story of why you and your wife love this home so the owner can empathize and practice the delivery before prime time. You also have to be willing to make the deal appealing to both of you. You could always offer a seller financing option where you pay slightly higher than fair market value but put less money down. Find out what this persons needs, where you can bring value and make the deal as enticing as possible.
At the end of the day, you want to ensure this property is able to cash flow positively once you and your wife do your next house hack. Having a property that cost you money every month puts a huge delay on your future growth potential.
Real Estate Agent · Plymouth, MA · Member since 2019 · 19 posts · 6 votes
5y
If you have the phone number, there is no harm in calling them and letting them know you are a local investor looking for property in the area and wondered if might consider getting an offer on their property.
Realtor · Boulder, CO · Member since 2016 · 3k+ posts · 5k+ votes
5y
Definitely just give the owners a call. I would recommend being very frank and upfront. Start with an apology: "I'm very sorry for the intrusion and I hate to bother you with such a solicitation, however my wife and I are looking for a home and there are absolutely no properties for sale right now. We love your building on (insert street name). I'm wondering if you would ever consider selling, and if so would you entertain an as-is offer at fair market price?"
As a building owner, I'd appreciate this straight-forward, genuine approach from a potential owner-occupant who is looking for a home and loves my building. I'd be more likely to sell to them than the Junior agents in the big commercial offices who call me every day and pretend they're conducting a survey or some other BS before getting down to brass tacks. Good luck!
Rental Property Investor · Rochester, MN · Member since 2017 · 224 posts · 323 votes
5y
@Noah Dunlap
Give them a call and be honest about the fact you are the one that’s been sending mailers. Be honest about the fact that you are interested in their property. But also work to establish a good relationship with them. If they say they are not interested in selling, no big deal. But call them back a month later and say “hey I’m looking at this other deal, and I’m wondering what you think about it” or something like that. Find a reason to call them in a professional capacity other than “do you want to sell.” Eventually, they may want to sell.
Rental Property Investor · Portland OR · Member since 2018 · 2k+ posts · 3k+ votes
5y
I would just pick up the phone and call the owner. I would let them know you are interested if the property were to be on the market and that you would be willing to buy without agents. The issue I see is the seller will want it on the open market to get the highest and best price for it so IMO I cant see them really selling off market but maybe they will? But in any case - b e professional, dont give them any nonsense about how you want to solve their problems - just say hey I understand your property at xyz may be coming on the market and I would love to discuss as it is exactly what I am looking for for my family (blah blah blah) I get calls like this all the time so just be professional - maybe he will give you his agents name so you can contact the agent? good luck!