Lets play a game: Would you buy?

Question

Hi Everyone,

I'm currently under contract for a property that will be flipped, but it is in the inspection period. The potential profit is modest, but it's a quick job. It should be back on the market in 3-4 weeks. I passed by the property today and I was happy with everything that I saw... until I met the next door neighbor. Let's just say he spent about a good 15 plus minutes bad mouthing the property (claims were baseless) and suggesting ways that I could get the seller to decrease the price.

This worries me. Clearly, if he was this comfortable expressing ALL of his negative opinions now, I would imagine he would be just as comfortable doing so when I place the home back on the market in a month. I'm worried that this will scare off potential buyers who are not as educated on homes as I am. Pair this with the fact that there is only a modest profit to be had, and it has me reconsidering purchasing the property. It's not as if I can drop the price so low that buyers may simply disregard his lies. I wouldn't make any money....

What would you do in this situation? I'm considering speaking to him in a respectful manner before purchasing the property to see if we can come to a mutual understanding that he can't continue this behavior when I place the property back on the market. Otherwise, I'm out of ideas? I may have to pass on the property as the profit margins are not high enough to deal with a neighbor who attempts to sabotage deals.

Any advice????

Thanks in advance!!

Franklyn Williams · Answer

@Brittany George : Hey Brittany, if you love the deal and believe, using conservative numbers and reasonable due diligence, that it will be sufficiently profitable (financially or experience wise) to worth your while, then try not to worry about what you've already said were baseless claims or expend time imagining what credence a buyer would give those claims.  Some things just aren't in your control and it seems you've adequately managed those that are.  So all else equal, you shouldn't pass on an otherwise good deal solely because of a bad mouthing neighbor, but if that could tilt the profitability balance, perhaps your instinct is telling you that the gains are rather thin on this one.  Best of Luck.

Tyler Blackwell · Answer

Potential sellers might just view the neighbor as a dweeb, but then again they might realize they don't want to live next to that dweeb, even if they're confident in the home's condition! But I'd worry more about the thin margins. In my area recently I've seen wholesalers make more profit than the flipper they sell it to. Who takes on more risk? Wholesaling is a different game in this market because inventory is scarce. If you've done a bunch of deals and are familiar with potential pitfalls and comfortable with the risk, then I'd say go for it, otherwise avoid.

Brian Pulaski · Answer

I've had flip neighbors who tell me all the issues of the house I'm buying (some real, some made up). Never had it an issue when I fixed and sold.

Brittany George · Answer

Thanks for both your input @Max T. and @Franklyn Williams. My husband had a talk with the neighbor and he made it clear he would not be an issue. Sometimes a little communication goes a long way. Thanks again. Now, I'm gearing up to close and get ready to rock this flip and move on to the next one! Cheers!

Max T. · Answer

I don't do many flips and so do my best to avoid small margin deals. Too risky.

Lets play a game: Would you buy?

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