So I'm new, but motivated. Today I have set up an appointment to look at a property that is zoned for 4 units. I am an architect with experience and my forte is: I can design well with small spaces (I'm originally from UK). I say this because the property I am about to go and view is on a piece of land that is smaller than the norm, so it will not be so attractive to developers here as they are use to building such units on bigger or the correctly zoned sized land.
I have little money at this time as it is tied up in the properties I own + I am not in full time employment (no cash flow right now to release), but I have the foresight to make this land be worth more than what it is, by using my architectural skills.
So where I need help is on how to secure the seller's confidence by achieving a conditional offer, subject-to doing my due dilligence with little money down (i.e. $1,000)?
I want to package this deal to possibly sell on to a builder with full permits in place (which will greatly increase the land price after an apraisal of the property with approved permit to build 4 units.
Can anyone give me any ideas to bridge the first stage, which is to secure the deal? Do I share my plan with the realtor? I do not have my own realtor, so it would be the seller's realtor. Maybe I can suggest that the realtor can be tied in to sell the future units if they help make this deal work?
The advantage I have here is that I bought a similar piece of land when I first came to Canada when I moved from the UK, but the difference is that it was mine. I did eventually develop it and built 4 units and sold 2 and kept 2 for rental purposes; so I have an example of what I can do, which I could show and possibly gain the realtor's confidence.
Sorry, I've said much, but I want to give you a good picture of where I am at with this plan, so you can best share your experience as to the best way to secure this deal. Obviously I will do due dilligence during my feasibility study, whether its worth tying myself in.
Thanks in advance
welcome to the site.
Welcome to BP!
Small spaces in Calgary would definitely be a niche market ... in the land of bigger.
Remember that the vendor's agent is primarily accountable to the interests of the vendor, even if s/he is double ending the deal. In fact, if you are not comfortable negotiating your own interests, it might be bet to get your own buyers agent ... the vendor still covers the commission for both ... their agent won't be as happy having to share the commission, but that's not your concern.
I just hate using realtors here because they are all about themselves, and do not seem to look past their pockets; the less amount involved, the better. Generally they complicate things.
I know... Bad experiences creates bad vibes.
Thanks again for your advice though
Hi Kelvin and welcome to bigger pockets.
My answer to you will depend on many factors. If you want to instill confidence in the seller then it is about how you structure your offer and how you act when you meet with the agent.
If you are confident that you can easily get the money to purchase the property than don't even make the offer conditional on financing. Make it a cash offer with proof of funds within 10 days of the acceptance of your offer, afterwhich if you fail to show proof of funds (i.e. an approval letter from your mortgage broker) than the offer is null and void.
You also could make the offer conditional upon you performing your due diligence. If you want to convey confidence than just act confident. When the agent tries to put you through the ringer than have responses prepared, the shorter the better.
i.e. "We will need to see your bank statements"
Response "I will provide proof of funds within 10 days of my offer being accepted, I will not waste my time doing that until I have an accepted offer."
Whatever you do don't babble, that conveys a lackof confidence.
Great advice and thanks.
I just got back from the viewing and in fact, I created a good first impression to the point that I did show the agent the development I did before and felt could fit on the property I am interested in.
Total confidence has been gained from the agent.
The property is in trust, so the agent was just chosen purely on their valuation of the property; I have created the incentive that if I get the property, then they have four to sell later. A promise that was agreed could not be gained by any other for the land in question.
Now the next hurdle is to make the offer to the committee for the trustee. Do I just offer the full amount on condition that the city accepts the proposal?
I will first do the number crunching.
I'm still looking at the best step forward, so please do not be shy to share your thoughts.
I share your sentiments: most residential real estate agents can sell a home to Dick & Jane Public, but can be detrimental to an investor. However, there are good ones out there, ask around to other investors (drop in on an REI association meeting).
If you are comfortable negotiating yourself, then using the vendor's agent can play into your favour (i.e. they will not have to share the commission).
My motto with agents is the fewer the better right now... I will negotiate my offer, build a relationship with the current agent to make the deal happen in my favour; but as mentioned previously, the seller is a trust who are looking at the best interest of the old person who is now in care.
My good will it this... if my numbers add up and the profit can be made without lowering the price, I will offer the asking price. I am a strong believer in what goes around comes around in this world.
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