The Best Deals I Made Happened VERY Fast……Or VERY Slow
The best deals in my 50 years of real estate investing happened VERY fast, or VERY slow; almost never in between, only at the extremes.
When I’m willing to buy (or sell) at REAL market value, that transaction usually proceeds at a NORMAL (3 weeks - 3 months) timeline.
But the highest profit transactions I’ve been involved in were 24 - 48 hours or 6 months +
Here’s a couple of examples on my “buy” side. A number of years ago an investor I knew was facing bankruptcy, and needed or wanted to get some cash - IMMEDIATELY - out of a 50% ownership interest in a small commercial building worth about $400 - 450k. He HATED his partner, and didn’t want to sell to him at any price, and didn’t trust him in any case. Because he was going to file BK the next day, and didn’t want this property included in the filing, he had to close the transaction theSAME DAY. Further, no title company would insure title as there was at least some chance that the sale could be negated by the BK court. I decided to risk it, and paid him $10k for his half interest. Two weeks later I completed the sale of my interest to his former partner for $180k.
Many years ago I was acquiring auto repair facilities, and leasing them out to either Just Brakes, or to independent operators. An acquaintance of mine asked if I would be interested in purchasing his property. Since I liked the location, I thought I could overcome the too small lot size and the inherent parking and traffic flow problem. The seller said he wanted $450k, which was about double what I was willing to pay.
2 months later the seller contacts me again, and tells me he’ll drop the price to $400k. This song and dance went on for 8 or 9 months, until he told me his last and final offer was to sell for $285k. I thought about it for a couple of weeks, at which time he called again dropping the price to $275k. I finally offered him $225k, and we settled at $235k.
Well, during the course of my “due diligence” period, I discover that the seller had been dumping motor oil and transmission fluid in the rear of his property, it had gotten into the sewer system, and he was cited for environmental contamination. He had paid a large fine, which covered the “penalty”, but had not cleaned up the hazard. I revised my offer to $110k, which he rejected. A few months later, about a year after we began talking about the sale, we agreed on a $115k price and 30 days later closed the transaction.
Btw, the environmental cleanup cost me $2700; I leased the property to an operator double net for $3,000/month, and 8 months later the operator exercised an option to purchase I gave him paying me $345,000.