Independence, MO · Member since 2016 · 192 posts · 18 votes
What do I say to the seller if he/she ask if I plan on living in the property or am I an investor. Do I be honest or say I'm going to occupy the property. I've gotten a few phone calls where I tell the seller I'm an investor and then they automatically tell me their not interested. Thanks
Flipper/Rehabber · Greensboro, NC · Member since 2010 · 623 posts · 615 votes
7y
@Deangelo Mack Many sellers think investors only want to take advantage of them, so they're afraid to speak with investors.
However, always be honest because you certainly don't need to be lying about anything that you do.
I read that you said you're using creative financing and you "won't close until you find a tenant". That's a whole different conversation and, I must say, I don't like that one. No matter your strategy, you must always be ready to close on the contract and live up to your end of the negotiation. That negative statement is about you, not about them, and you definitely come off as some kind of scam.
If you're trying to do this business with no money or investment of your own, then you're very new in the game and this type of transaction is what hurts the reputation of investors.
The best thing you can do is take the time to learn how to buy and sell investment properties and get yourself qualified to do so. Creative financing is a great fall back for experienced investors, but a terrible way for people to try to learn the business. Please, never take advantage of a seller.
Lender · Honolulu, HI · Member since 2018 · 4 posts · 5 votes
7y
Deangelo, go ahead and be honest with this one. Some States/Counties charge different levels of transfer taxes based on whether the buyer is an owner occupant or investor so it is important that this is accurate. Also, if obtaining financing, the lender will need the purchase contract to reflect the correct occupancy if it is in the purchase contracts in your area. Next time you get that reposne, ask them why they are not interested in investors? Your money is as good as anyone elses. Dig down to find out what the real hesitation is as their goal is to sell and you are a potential buyer and why would someone so quickly dismiss a potential buyer?
Hollidaysburg, PA · Member since 2015 · 327 posts · 350 votes
7y
@Deangelo Mack, I am a firm believer in integrity, and would definitely recommend that you take the honesty route. You don't want this to come back around in the future and bite you. However, I'm not suggesting you show your hand to anyone, but if they ask, just be straightforward. I would also keep to the facts, tell the prospect that you're interested in their property, not what your end state is (again, unless they ask). People typically want to know what you can do for them, not what you're doing for you. I hope this helps, and good luck!
Realtor · WV · Member since 2018 · 454 posts · 310 votes
7y
I would suggest to not only tell the truth, but bring it up before they even ask. Put it in your introduction. I don't know exactly what your mission statement is but say something like " My business works hard to find properties that you can acquire through your network of investors and match with families" Of course match this with what your business does. Always turn the perceived weakness into a strength. If you wait until they ask, and try and avoid it the only thing they can feel is negative. If you flip that around you make it more like they are part of a positive process that will help another family.
Real Estate Broker · Minneapolis, MN · Member since 2016 · 530 posts · 398 votes
7y
@Deangelo Mack
I’ll assuming this is a multi-family property you are planning on living in. There is no time where you are required to find a tenant before you close. Usually after possession so you can begin showing the property.
I hope I’m understanding the question correctly?
Flipper/Rehabber · Greensboro, NC · Member since 2010 · 623 posts · 615 votes
7y
@Deangelo Mack Many sellers think investors only want to take advantage of them, so they're afraid to speak with investors.
However, always be honest because you certainly don't need to be lying about anything that you do.
I read that you said you're using creative financing and you "won't close until you find a tenant". That's a whole different conversation and, I must say, I don't like that one. No matter your strategy, you must always be ready to close on the contract and live up to your end of the negotiation. That negative statement is about you, not about them, and you definitely come off as some kind of scam.
If you're trying to do this business with no money or investment of your own, then you're very new in the game and this type of transaction is what hurts the reputation of investors.
The best thing you can do is take the time to learn how to buy and sell investment properties and get yourself qualified to do so. Creative financing is a great fall back for experienced investors, but a terrible way for people to try to learn the business. Please, never take advantage of a seller.
Los Angeles · Member since 2018 · 464 posts · 471 votes
7y
@Deangelo Mack
Always tell the truth in all things. If you "tell little white lies" there's a reasonable chance people will find out anyway, then you'll REALLY look bad!
lol I haven't said anything I've posted on here to the seller. Nor have I lied to a seller. Im just asking a general question.
Yes, yes, yes, "this is only hypothetical mind you, but -- and the question might not even come up -- but if it does -- should I be honest?"
No worries, I understand mostly, and I certainly can't claim to have always been 100% honest 100% of the time. And seriously, sometimes there are truths that I'd just as soon nobody knew about, and you can bet I won't be volunteering that information -- anymore --
As to the original question, as originally posed -- you're still better off being completely frank. If somebody calls, and it turns out they don't want to deal with investors, well, to heck with 'em. They're not the only starfish in the sea, and they probably aren't real starfish anyways. They're probably just clams with aspirations of becoming starfish one day.
But if you're finding a large quantity of sellers who happen to be turned off by your investor status, maybe the problem is you're looking in the wrong markets. Try looking in markets where sellers are expecting investors, even seeking them out. Try sending out marketing materials -- in my neighborhood, for example, every tree, every light post, every telephone pole is festooned with signs, "I BUY HOUSES, ALL CASH". So, anybody who calls the number on the sign is surely not expecting somebody who wants to move in.
Maybe you need to find an agent who knows how to talk to sellers. A good agent can be worth his weight in gold-pressed latinum. You can probably find one on BP who at least has an investor's mind-set. Maybe you need to look at places that are already being rented out, such as N-plexes or apartments. You might visit hudhomestore.com or auction.com for foreclosures.
I surely do not have the answer. Except, be honest. It's bound to work out better in the long run.
Independence, MO · Member since 2016 · 192 posts · 18 votes
7y
Thanks @Alvin Sylvain. Ive gained new ground on my road to getting my first deal. Im just trying to figure some things out... So after me and the seller agree to what ever terms. What happens after that?
Thanks @Alvin Sylvain. Ive gained new ground on my road to getting my first deal. Im just trying to figure some things out... So after me and the seller agree to what ever terms. What happens after that?
Well I have no idea where you are or what you've done or who you've talked to, so forgive me if I assume all you've done so far is seek out sellers.
Consider: getting an agent. OK, that shoots 3 to 6% of the deal right away, but for a first time, it might be worth it to make sure most of the T's are dotted and the eye's crossed.
Or, go without. Then, acquire a RE sales contract form that's valid in the jurisdiction where the property is located. (Agents are good for that). You could probably ask on BP to see if anybody has one you can use. WHY? Because it covers all those little nooks and crannies that you and the seller couldn't possibly have thought of. Like: is there a contingency? (of course there is, you want the place inspected) Like: who pays for which parts of escrow? Is the selling agent the same as the buying agent? Et Cetera.
Maybe: find a good RE attorney. It's amazing the kinds of traps a good attorney can steer you around. But if you're careful, and do as much research as you can, you can just as easily do without.
Definitely: Find a good inspector. Underline"good". My daughter just bought a house in St Louis, and it was inspected, and a year later, the basement smells like rotting mold. It's going to cost her thousands to fix a problem that the original inspector should have caught. She could have negotiated a better price, had the seller fix it, or move on to another house, but the moron inspector missed it.
Definitely: Escrow company, or whatever it is they do in that jurisdiction. I'm in California, we use escrow companies as neutral third parties. They hold all the moneys until all the T's are dotted, financing acquired, contingencies contingered, etc. And who's paying them?
Speaking of paying folks, have you arranged financing yet?
Definitely: ask more questions here on BP, because I'm pretty sure I'm forgetting more than one something.
Lets say me and the seller agree on terms. How long do i have to find a tenant before we have to close?
Once you close the house is yours. And you can’t advertize it as a rental before you actually own it. If a investor called and started saying they don’t close till they get a tenant, or start with the creative financing I’m not going to take them seriously. I’ll hang up on them.
I don’t like to sell to investors because for the most part they expect huge price drops it a lot of concessions because they are investing.
Independence, MO · Member since 2016 · 192 posts · 18 votes
7y
Sorry if I come off as confusing @Rob D. Im looking at a Purchase Agreement and line 7 which talks about CLOSING. says, "The closing of the sale (the “Closing Date”) shall be on or before _____90 days from acceptance__________, or this Agreement shall terminate unless an extension of time is mutually agreed to in writing. If the method of payment for this transaction is cash, assumption or conditional sales contract, the closing fee shall be paid by ___ BUYER ___ SELLER ___ shared equally."
Sorry if I come off as confusing @Rob D. Im looking at a Purchase Agreement and line 7 which talks about CLOSING. says, "The closing of the sale (the “Closing Date”) shall be on or before _____90 days from acceptance__________, or this Agreement shall terminate unless an extension of time is mutually agreed to in writing. If the method of payment for this transaction is cash, assumption or conditional sales contract, the closing fee shall be paid by ___ BUYER ___ SELLER ___ shared equally."
That’s just simply a clause of x number of days to close escrow where you’re promsing a 30/69/90/120 day escrow. If you need more time past the agreed close date the extension must be agreed in writing by both parties. Tats pretty standard clause in a home purchase contract,
Sorry I assumed you wanted to advertise the house as a rental while in escrow.
Independence, MO · Member since 2016 · 192 posts · 18 votes
7y
Thanks @Rob D. and @Marci Stein. So after me and seller agree on terms. I have my attorney write it up. Then does he/she mail or email the contract to the seller? or would i have to drive it over.
Investor · Denver, CO · Member since 2018 · 57 posts · 30 votes
7y
@Deangelo Mack
Sometimes you'll come across sellers that are prejudice towards investors. Part of the reason why they feel that way is because some investors aren't honest with their intentions and the seller loses trust. Showing that your a trustworthy person will give credibility to your name and brand.
Thanks @Rob D. and @Marci Stein. So after me and seller agree on terms. I have my attorney write it up. Then does he/she mail or email the contract to the seller? or would i have to drive it over.
Really depends on your state. I would assume the terms are agreed upon, sellers attorney writes it up and sends to buyer/attorney for review. If anything is amiss the cibtract gets rewritten.
Out in Ca most transaction terms/contracts are written by agents. Well written is giving them a lot of credit, they really just fill out a home purchase contract that’s mostly fill in the right blanks. . Truthfully I would rather use a attorney. I dint care for agents a whole lot. Most I met are really mediocre. And I’m being generous