how to deal with the owners for off market deal

Question

How to deal with the owners who are asking alot for their fixer property, and who think their property worth too much. And the property is total tear down.

Landon Bleau · Answer

Aman, unfortunately we're seeing a lot of that these days. My best advice is to run the numbers and make an offer that works within those numbers, don't get caught up in this market and bid away your profits. Run your numbers and figure out what you're willing to pay and stick to it, make the offer and if it doesn't get accepted, on to the next.

Ben Riechmann · Answer

Not saying this is you, but answering to hopefully help by answering more broadly. A seller often sees all the good things about the property while the buyer sees the problems.  As an investor, it is important to look at a lot of properties and make an offer on a few.  Only what you think they are worth considering what the cost of what it will take to fix them up will be and other things that will affect the deal.  Often your money is made in how good you do or do not do a deal when buying a property.  If you put in all the factors to make sure it will cash flow when you are done for a buy and hold or if it will give you a good profit for a flip so you can move on to a bigger deal that will help you with your short and long-range goals.  If they want more than it is worth for that property, tell them this is as much as you are willing to pay, whatever that number is, and keep on looking.  They may contact you back later on and take your offer or not.  On bank-owned homes, the bank would often laugh at my offer, I would shrug and move on with my looking and the realtor would contact me later to tell me they are selling it for what I offered or lower.  Same with some investors.

If you really don't like the idea of moving on from the property, and there is another reason you want it, like you own others on that street then there are some other options.  Find out how they bought the property.  It may not be that they are overvaluing the property, but they were newbie investors that bought it online or some other way and did not know what they were getting into.  There may be some other reason they think they need that much money like to pay off a debt or reach some goal.  If you know the why in this circumstance, maybe you can come up with a solution that will not make them totally happy as they will not be getting as much money as they hoped, but some kind of mutually beneficial deal that helps out both parties so the sale does not sting them as much.  I figured out why two brothers needed to sell a house and I ended up coming up with another solution for them and saved me tens of thousands on a sale.  Getting this information out of people isn't always easy, but can pay big dividends and may make both parties happier.

More often than not though, look at a lot.  Make an offer on a few.  Keep looking.  Don't kick yourself on deals you didn't get as there will be others out there.  Don't be afraid to offer less than you think they will take, especially ignore realtors when they say they won't take it, as I have had them take it more than once.  A seasoned realtor knows you never know what will happen.  Good luck and happy investing.

Stephen Brown · Answer

Hello Aman. All over the country your seeing this: people listing their homes for way above their actual value just because the market is super hot right now. I'd say be patient, hold onto the phone number and call back in a little while when the seller realizes they won't get top dollar.

Nick C. · Answer

If the property really is a tear down and the seller is asking for a rehabbed price, this sounds like a waste of time. You can present your offer and why, but convincing someone who wants retail to take a tear down price won’t be easy.

Aman Shahi · Answer

thanks Landon. And as a rookie, how  to find a right number for the property in the city like Los angeles.  And the rehab needs like total tear down. And owner think they just found the gold mine and askin a price as equal to remodeled one.

how to deal with the owners for off market deal

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