I Found a Cool Property, Whats Next???

Question

Today I drove past this very run down property. It appears to be a vacant 5-plex. This property intrigued me so I decided to dig a bit. I am interested learning more about this property and if it could be a opportunity. I am trying to figure out what my next steps are. I found the owner (out of state), his address, and phone numbers. I feel like a freaking computer wizard for doing this. I feel uncomfortable just cold calling him. The other option is to write and mail a letter. Which do you think would be more effective? Here is some information from various local mapping, plot records, and google wizardry. (Also I haven't seen rents near me for less that $900 for a 1b 1br)

The owner is in his late 70's and has owned the property since 1988.

The property was built in 1952

It is classified as commercial property

The building is estimated by the town at $7000

The land is estimated by the town to be around $240000

It is on a 1.5 acre plot

It is zoned in an area that the city wants to gentrify through supporting the development of new business centers

there is enough room for a commercial business and parking-lot.

My questions include the following: Knowing what you know, what would you do next? How should I make contact with the owner? What should I tell him? Would you Renovate the units for rental income, would you subdivide the plot, or hold it in the chance it could be bought for a business? Where could I get the money for this (College student)? What other questions should I be asking?

Any discussions or advice is appreciated. Feel free to ask me questions. Ill do my best to find answers.

Thanks,

Spencer

Moises R Cosme · Answer

1. Mail him something that will stand out -

2. I would cold call after 7 days of sending the mail piece; make it simple, let him know you are interested in buying the property.  You should not be afraid to make the call, since it is a near certainty that he has gotten other phone calls from other prospective Buyers (if you found the number so did others).  Making the call is important since often times getting the deal is simply a function of timing, sometimes a Seller is just ready when you get them on the phone.

3. I would NOT go into any big details as to what you want to do with the property.  The conversation should NOT be about you, it should be about listening to the issues he has (there's a reason why the house is rundown) and offering a solution by buying the house from him.  I cannot emphasize this piece enough - when talking to the Seller, I recommend listening much more than talking.

I hope this helps!!!

Moises R Cosme · Answer

Spencer,

1. Make sure you have a commitment from a partner before you make an offer; there is nothing wrong with you calling him and telling him you want to buy the house and are willing to pay a fair price for it.

2. The first question I would ask about the property:  is it okay for me to walk on the property and take pictures of it?  Questions to ask:  is it occupied?  if so, are there leases?  how long have the tenants been there?  does he have contact information for them?  how old is the roof? are the utilities separated?  how old is the HVAC?

3. Handwrite the letter, make it simple - Hello, *********, I drove by your property & I am really interested in buying it.  I will make the purchase process simple & easy - I will buy it 'as is' 'as seen', please call me at your convenience!!!

4. If he is ready to sell, ask him how you can get him the offer (mail/email/fax)

5. How much do you think the property is worth fully renovated?  How much renovation do you think the property needs?  The property description will be useful after you answer these two questions.

Spencer Davis · Answer

Thanks @Moises R Cosme, this helps a lot. It makes sense that others would have likely found his number before me, and it would likely be a question of when. Asking about why the property is the way it is and trying to better understand his position is something that will definitely help.

Is it wrong of me to contact him saying i'm interested in buying the property when I don't have the means personally? I would likely have to bring in a partner. What questions would you ask him about the property? What would stand out to you in regards to a letter? Do you have any tips that would help me seal the deal if he is ready to sell?

Also, What are your thoughts on the property?

Thanks,

Spencer