Okay, so I'm cracking up that I'm in this state of "oh crap what the heck do I do now?!"
A couple of weekends ago we went out and drove a few neighborhoods, took down a few property addresses (I guess it was about 20 over the course of two or three drives over 7 days).
Yesterday (YESTERDAY!) I sent out five (yes, FIVE) hand written yellow letters to as many absentee owners. Two of those letters were to addresses here in Washington State. Tonight one of those two called me and left a message saying, "I got your letter about my house in Tacoma, and I'm interested in talking to you."
So now, here's my plan, but I need some input on information to gather. Keep in mind, neither my husband nor I have a broker's license and this is our first non owner-occupied potential property purchase.
1. During the first call, I plan to let her do much of the talking. I want to use the time to build rapport and gather information about what is going on in the house and what her needs and the general issues are.
2. Once I have gathered that information with as many specifics as I can pick up without sounding pushy, I plan on telling her that my husband/partner and I are going to pow-wow figure out how we can best help her/figure out what her options are and get back to her.
So, what questions do I need to ask in order to set myself up with all of the necessary information to explore the options and get back to her with an educated and helpful list of scenarios?
@Stacey Olson To attempt to advise you, I need to know what your plans are for this house. Are you buying for a rental, buying as a fix and flip, or wholesaling? How much earnest money do you have available. If buying are you a cash buyer, credit buyer, or need owner financing?
Hi @Stacey Olson ,
Relax! And remember, this is what you wanted. Everyone, 100% of the time is surprised by that first phone call, and almost everyone asks the same "now what?" question.
I generally agree with your two step plan, especially in letting the Seller do much of the talking. That said, you DO want to stay in control of the conversation at all times, and there ARE certain pieces of information more valuable than others.
You may want to check this blog post out:
Please be sure to let us know how it goes....inquiring minds want to know!
I assume you are marketing toward motivated sellers? Diagnose what the problem is and see if you can find a way to solve it. That's our job, yes?
Tacoma was a surprisingly delightful town. Beautiful sound views in some neighborhoods.
I think one of the first questions to ask no matter what your goal is, is how much do they owe on the property. If you're looking to purchase something below market value, and they owe $100,000 on a $100,000 property, it might not even be worth continuing the phone call.
@Stacey Olson great job getting a response, that is a good ratio already. I highly recommend before you respond listen to @michael quarles advice on podcast show 77, he has great tips. I'm in sales and voice inflection with positive/negative reinforcement is money, literally. Where in T-town are the properties?
The best policy is be honest with the seller and let them know you are a cash buyer or just a wholesaler.
@Stacey Olson any update on this? I'm interested to see how it went!
Okay @Matt C. , thank you for asking! So, here is what happened (I learned so much through this process. Obviously I will do things differently next time from the moment I start vetting the property owner, but live and learn, right?):
Ultimately, the owner decided that "if someone is just going to come in and flip this property, I may as well just do it myself." She owns the house outright (paid 205k cash back in 2006) and despite the condition of the property and the stress she is feeling in relation to the property, she is not able to connect to the low numbers that I and others are suggesting (in it's current condition, we're looking at 40-50k with about 90k in repairs to get to an AVR of 180k-200k). Her daughter came with her, and as we discussed the options after touring the property together, her daughter said, "Mom, I'll die before letting you take only $40k. I will come in and do all the work myself if it means that you get more money out of the property."
So, obviously, there's some emotion ruling the roost here. As it stands, we left on great terms with the intention to check in periodically and revisit the options if the project and stress prove to be more than she wants to deal with.
Thanks all for your continued feedback!
Did you show the seller in writing from a GC that it would take $90K in repairs or did you just pull that number out of the air to get a better deal?
wow property trashed in 10 years.. this is also a good testament that one need not fly half way across the country to buy low end deals. they are in each state. A rehabber that does volume will come in and pick that up with a goal of a 20 to 30k profit... so a sale number based on rehab would be closer to 60k not 40k I think that's your competition.
Good job keep at it....
Jay Hinrichs, TurnKey-Reviews.com | Podcast Guest on Show #222
What all is wrong with the home to justify $90,000 in rehab? That's a pretty large budget for a house that will ultimately sell for $200,000.00
@Ed Lee: the owner bought just before the bottom dropped out of the market here. The house needed some help even then. The demoed down to the studs, then left the house standing long enough for people to break in, have parties, squat and wreak general havoc.
@Spenser Harding We're digging into most neighborhoods in Tacoma. Currently working on leads in McKinnley, Proctor, Central, Lincoln and Hilltop. Been listening to PC#77...Good Stuff! Thank you!
@Jay Hinrichs: You're right, that is totally the competition, except I will say that with this particular owner, general contractors/rehabbers are a huge turn off for her, so my true advantage is the mom-with-heart-and-pure-motive standing :)
@Joe Gore: there was a GC there right before me who broke the rehab costs down for her. He had the same estimated cost.
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