To start out, I’m new at real estate investing and I just got my real estate license. I’m looking for my first flip. I’ve got a warm lead on a house in a sought after neighborhood in my area. It’s a small 2/1, 810 sq ft. that a friend of mine is currently renting. The landlord is elderly and he’s gifting the property to his son, who is looking to sell. My friend told me the son brought a realtor over to look at the house today.
If this house goes on the market the price will likely soar in a bidding war. I’m trying to snatch it up before it goes on the market. I’ve priced it based on comps in similar condition and am working backwards to see if the numbers work. It looks like they might work. What are some strategies I can use to get this property before it hits the market?
Grant Cardone and a few others did a pod cast on things like this. I would listen to it if I were you.
First you need to run numbers to find out where the make money line is and figure out what you can pay and still cash flow decently. Then you need to get financing lined up. Then call him or find a spot to meet him and say that you heard he wants to sale the property. point out that if he sells directly to you that it will save him s lot in realtors fees. Then find out why he wants to sale and build your offer around that. If he wants quick money then figure out to buy it and close very fast. If he doesn't want to be a landlord despite liking monthly income ask about an owner finance. Once you find the motivation you can craft your deal so it will be more appealing. Just ask questions and really listen. Try to have him give you a price first, if realistic see what you can do, if way too high explain why that won't work for you. You simply cannot pay so much you will not cash flow. Learn what the comps are so you know when it is a deal and when it is not. Good luck.
Well you're an experienced licensed professional who also buys homes so I would imagine you'd approach the seller directly and present your offer. Your offer will most likely be well below what they would get in the open market but you're going to emphasize that they won't have to pay realtors commissions, deal with traditional financing contingencies, the home not appraising and deal falling through etc.
I'm almost sure You're also going to put up more earnest money than a traditional buyer (enough to demonstrate your obvious status as a real investor) and you're going to close quickly and with all cash or hard money or a line of credit. And you'll have a proof of funds letter or a copy of the account's statement to show the owner. Your option period will be 5-7 days and you'll most likely be closing within 10 days because hey you do this for a living and you know what you're doing.
You'll most likely show up in a decent shirt perhaps khakis or slacks but not too dressy because I'm certain you're also responsible, modest, and down to earth and approachable. You'll of course explain the benefits of your offer smoothly calmly with confidence charm and eye contact and you will not leave until the contract is signed. But you'll probably spend the first 20 mins or so talking about them, their family, how great things were back in their day, and how much you hope to be like them one day because you're not just about a deal you're about building relationships of course. But again you're a licensed experienced professional so I'm sure you knew all of that right? ;-). good luck