I'm a couple months into my marketing campaign, and have received a couple written responses. In a way I really like these because it shows an extra degree of motivation on the seller side since they took the extra time needed to do so. It also allows for slightly less urgency to respond as they are certainly expecting to wait an unknown amount of time for a response (within reason).
However, the responses I just received are three cases that I'm not overly interested in pursuing. One is in a flood zone. It has a somewhat deep back yard, leading to a single levee. I live near the community, and I know that this levee was breached a couple years ago. The other is a very large plot of land (maybe 3,000 sq. ft?) in a mixed residential/industrial area. On one side is a slightly busy street, and the other side is a storage facility. The third is a single family home with the main entrance on the second level of the home - there is a large flight of stairs leading to it.
As I'm trying to get my R.E. investing business off the ground, my first reaction is that I should follow the entire process through on all of these, if for no other reason than to get the experience. I think of several BP podcast guests who discovered their outstanding niche by (thoughtfully) getting into something that is outside their comfort zone. Additionally, I think of how much I'm spending for leads, so I need to pursue all that I get until I know there is no deal there.
So, why am I hesitant to pursue these? The only thing holding me back is that in each case I feel that I'm pursuing a property that I may not be able to get rid of, or in the case of the vacant lot a situation where I have very limited knowledge (none, beyond a BP podcast) of how to do due diligence or the exit strategies available to me.
Am I over thinking this and being too gun shy? Or, is there enough legitimate cause for concern that I'm avoiding a nightmare? The right response is probably that I will not know until I jump in and do the work to find out what I've got. What do you think?
I'm a complete newbie so consider the source, but it seems to me u have no idea if any if these are a good deal without nailing down PRICE and terms, and then any of them could be a great deal?
Also, as you said each represents a learning experience especially in the area of negotiating.
Thanks Kathy. Sounds right to me - if they're giving it away I'd take it, so I'll need to find out how low they're willing to go and see if it's a good deal or not.
You could show the properties to your end buyers before you negotiate for them. If they tell you right away it's a bad buy, then you know how to proceed. Refer to Ben Grise, PODcast 90 or so.
On a separate note, what is your RE experience?
@Timothy C. do you have time to learn? If so these are learning opportunities. For me when I'm venturing into new areas I gauge my willingness to pursue the lead based on their disclosed urgency. If they "need to sell" then I go for it figuring I have a shot at making a deal based on their motivation. If it's something I'm interested in but they don't seem overly motivated then I still dig in and learn. If I'm not interested and they aren't motivated, that might be a time to wait for another deal.
@Matt Huneycutt - I'll jump ahead to #90 (or whichever) and check that out. I'm only on #77 at this point. Thanks for the response. I'm looking for a deal to keep (for B&H or flip), but that's certainly a great tip if multiple come in and I need to wholesale what I cannot handle at that moment.
@Bill S. - Thanks, yes that's what it will come down to - digging in and finding what's there.
If you're not interested in taking on it, why not refer it out to an investor who does want to take it on? At least you can make a few bucks.
Good point @David Hunter - thanks for responding.
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
Join the Largest Real Estate Investing Community
Basic membership is free, forever.