I have yet to contact the owner of this property. 2/1 with detached garage. It is literally next door to my present rental property. It was purchased two years ago (17.5k), and the new owner has done essentially nothing with the property. He'll come by every few months, but all he's done that I'm aware of is drop a bunch of wooden fence panels on the back porch and park a car in the garage for a few months. This is probably the ugliest house/yard on the block, and fixing it up would also probably up the desirability of my rental next door.
The owner is behind on property tax payments. He has two payments due for the property this year, and as of yesterday, he is now behind on both and incurring penalties. I looked into the owner, and he is a realtor that owns at least five properties relatively nearby (within a few miles), and lives about half an hour away. He is also behind on one other property tax payment that I can see. (Information gathered from Google searching his name looking for online county records.)
I don't have the cash up-front to do a cash offer, and the house is too cheap for a bank to be interested, so naturally I landed on seller financing as a potential path in, assuming he's interested in selling. I've thought of something along the lines of paying him the back taxes owed + penalties (~2k) as a "down payment" and making payments from there with whatever terms.
As he is a realtor, I'm sure he knows the tools and tricks of the trade. How can I approach him with this in a way that he'll a) take me seriously, and b) give me the time of day? As he's a realtor, should I abandon the plan, as if he wanted to sell he easily could in theory?
I am also open to any other creative financing routes I could utilize. I don't have too much in the way of other assets (~$4.5k in a current 401(k), conservatively ~$12k equity in my current rental (value ~20k).
Any input? I will 100% admit that I don't know exactly what I'm doing and am not yet an expert of any kind. Thanks.
What is the existing financing? Where is the sellers motivation if any? If he is an agent asking if you wants to do some kind of a joint venture with you where you both can profit
It depends on the Realtor and if he wants to sell. But did you know in most states, you do not pay anything to retain the services of purchasing properties with a Realtor assistance. Most are paid by the seller. So you can always call a Realtor and interview - have that person approach the owner and see if a deal can get done.
The one you pick may have a relationship with the owner.
@Brian Gibbons I am unaware of any current financing. Is there a way to find that out with public records? It is my naive assumption that he paid cash. I assume motivation would come from being behind a few grand on taxes across two properties. I did not consider the option of a partnership of some nature; that path definitely merits some thought.
@Sean Brooks So, what you're saying is that before I even determine the owner wants to sell, I could talk to another agent to approach him? That actually sounds like a pretty attractive way of conducting things.
Thanks for the input!
Congrats on the first rental, Colin.
There's a saying ( from Wayne Gretske, I believe): "You miss 100% of the shots that you don't take."
If Mr Realtor says no, you have lost exactly nothing. He may or may not be motivated, one way to tell for sure is by talking to him.
He may have some life challenges and you could be the answer to his prayers. You never know, til you find out.
Even if he's not interested today, he may be interested I the near future so develop rapport and follow up.
I would suggest a live face to face, if possible and phone next.
Remember that you are a professional and successful investor looking to expand your portfolio. You don't need to feel intimidated by anyone. Especially a guy that is not taking care of his valuable real estate assets. Go help him.
Good luck! Go get it!
Yes. It should not cost of thing out of your pockets. Before I become a Realtor, I invested in the Philadelphia area and then moved to Delaware. I was visiting and noticed a new development going up so I gather information and purchased a prime lot. After the house was built, a Realtor that lived at the beginning of the develop stopped pass one evening and indicated that he represented a client that want to purchase the home. I listened to the offer, but realized that it can only go up in value.
By having a Realtor represent you, this takes you out of the equation and places the focus on the person that he may have respect for and may know from the industry.
And like Peter said, if he says no, you lost nothing but you have gain a professional that will search for that next deal.
It's a lot that the public can't see and I realize the minute after I got into the business.
Good luck and keep moving upward!
@Peter K. Thank you for the encouragement. That was very empowering.
@Sean Brooks I win either way, you are absolutely correct.
I'll let you all know how this progresses!
This sounds like a decent lead (property is in below average condition). And since you know he's a Realtor and researched his info online that means you must have his phone number and/or e-mail. That's a great head start to making this deal happen. To make it even better the house is in a location you're familiar with and already own a rental property.
You should call/text/e-mail him or at least drop your information at the property to inquire if he's interested in selling. I don't see why you would need a Realtor for that.
You'll need to see what mortgages/debt is owed on the house. Remember that even though he may have bought it for cash two years ago, he could also have took out a mortgage or home equity after it was purchased.
Go for it....and let us know how things work out. Good luck!
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