Let me start off by stating that I'm a fairly new investor. I started a direct mail campaign a year ago that focuses on probate in the Atlanta metro area. Over the course of the year, I have gradually built up a a solid list of folks who have called me after receiving one of my letters. Most of these folks are NOT motivated and are mainly just interested in learning more about what I do and to try to understand what the property might be worth. Even though they are not motivated when they call me, if I can determine that the property has some substantial equity, then I still spend the time to go look at the property, build up a rapport with the executor and make them offer.
The following series of posts and explanations, are with one particular seller who declined my initial offer but because I followed up with them, they became motivated and accepted my initial offer. As I gain more experience, I am getting more and more of these motivated sellers and have found that it is VERY important to keep them on a list so that I can reach out to them about once a month and see if anything has changed with their situation.
I received a call from Betty in the middle of January who let me know that her Aunt passed away in the middle of 2014 and she was the Executor of the estate and in charge of selling the property. She stated that she was in middle of talking to an agent about listing the house but she had gotten 2 of my letters and wanted to find out more about what I do.
I explained to her that I was an investor looking for properties to flip and also to buy and hold as long term rentals. She gave me the details of the property. A 3 bedroom, 1 /2 bath house about 1270sq located in Atlanta. I asked her if there was a mortgage on the property in which she said it was free and clear. She went on to tell me that the Aunt who passed away, did not have any children but did have 9 other heirs to the property compromised of nieces and nephews.
I went on to ask her if she had any idea how much the property might be worth. She said she did not and I explained that I could come out to take a look at the property and give her an idea of the value.
Good deal Kyle! Congratulations! Thank you for sharing.....
@Kyle Kufeldt Well done my friend. I agree totally with you that you have to keep following up. I have the same thing - a list of people who responded to my direct Mail Campaign. I touch bases with them once a week, hoping that I'll get through at some point. Remember - persistence.
Let me know if you're interested in anything in Cobb county. That's the area I farm.
When I went out to the property, I met her, her husband, and her son. I got to know them and quickly came to find out that the property was about an hour drive for them and was starting to become a burden to have to keep up with the mail and maintain the property. I walked around the house and could see quite a few things that would need to be repaired. The most expensive being the roof. I discussed all the work that would be needed on the property and tried to get a sense of whether they were prepared to make the necessary investment. Before I left, I told her that I was going to do a bit more research on what the property might be worth and that I would get an offer to her in a few days.
I'm new to the REI game, but have been in sales for almost 10 years- Persistence has won me more business than anything else. I had a client tell me once after the 9th follow up(per her direction) and she finally bought, that I was the only rep to actually keep following up with her so naturally I won... I haven't stopped following up with folks since.. Way to go @Kyle Kufeldt !
"Nothing in this world can take the place of persistence. Talent will not: nothing is more common than unsuccessful men with talent. Genius will not: unrewarded genius is almost a proverb. Education will not: the world is full of educated derelicts. Persistence and determination alone are omnipotent - Calvin Coolidge
Next is the email I sent her after our initial meeting giving her my offer. The important thing to consider in the mail is that we are not talking about an expensive property. This house is in an older neighborhood but not in a transitional area yet where the property might be worth more than the house. As such, I was considering the house as either a rental, or as a wholesale opportunity. I believe the house could rent for $850 a month. If I were to wholesale it, it would be to another investor who would be interested in renting it.
It was a pleasure to meet you yesterday and I wanted to thank you for showing me the property. After I got back home yesterday, I spent a good bit of time running the numbers and unfortunately, the estimate on repairs I gave you yesterday, is more after putting a pen to paper.
In order to get the house ready for new home buyer, I believe you will need to make these repairs.
- New Roof
- Refinish Hardwoods
- Repair Damaged Sheetrock
- Repaint All Interior
- Repaint Front entrance exterior
- Replace Carpets in Basement and Stairs
- Service the furnace and air conditioner
In my estimation, this will be a $10,000+ renovation. Most of that expense is from the new roof, repair of water damaged sheetrock, painting and refinishing the hardwoods. In order for me to be able to buy the house and put $10,000+ into it, I would need to buy it for $25,000.
Keep in mind that if you go with an agent to sell the house, you would still need to put the $10,000 in order to get the maximum value of $47,000. As we talked about yesterday, selling with an agent would add commissions to the closing. You would pay 3% to the buyers agent, 3% to the sells agent, and I typically see another 3% to help the buyer pay for closing costs. This would put the home at $42,770. After you put in $10,000 in renovations, you would be looking at $32,770. I think my offer of $25,000 is a fair offer and I know the whole neighborhood would benefit from the additional attention that was put into the house.
Another possibility that I didn’t talk about yesterday, would be for an offer that included what I call seller financing. In this offer, I could bring $5,000 in cash to closing, and then pay the rest of the balance over a number a years. Since there are so many heirs to the property, I didn’t think this would be something that would appeal to you but it would allow me to offer more for the property. For this offer, I could offer $30,000.
Please let me know if either of these offers are something you want to move forward with, and I can put them into a more formal offer for you to review.
@Kyle Kufeldt this is a testament to the business and why 95% of folks who try to do what your doing fail.. they don't have either the stamina, financial withal, patience, and or stick to it ness to succeed in the sales and marketing business.. they learn on line what to do but never learn how to do it. and when it does not work they quit
Sales and marketing is all about long term commitments of all of the above then being a good enough closer to actually close the order. Many never get training her and they will never really succeed because you just can't read off of a script you need some people skills to close deals.. Listen to Quarles pod cast for a pro.
When we started in the Timber business in the North west I created my own custom data base. ( pre google an lap tops just came out and Oregon has great aerials photos available to the public so this was key)We created a custom data base that had every none commercial timber property of over 10 acres that had observable timber on it. this from the CA border to just south of SEattle about 20,000 properties it took almost 2 years.. we then hammered that data base and it took an average of 7 to 15 touch's before we landed a deal and even with all of this a great year for us was 50 transactions.. out of all those refined and defined leads. My partner would always say until they clear cut it its a lead. !! some deals we worked for 5 to 7 years before we landed them.. but our deals were large they averaged 50 to 100k NET profit per deal.. So we could spend quite a bit on this.
We also only mailed to folks we could not get on the phone.. We had telemarketers 2 days a week year round. People In rural areas love to talk LOL..
So moral is create your data base and hammer it and every lead is a lead until its sold to someone else.. never give up on them.. Also simply ask them if its OK if you check back in in another 6 to 9 months they will always say sure. at least 99% of them will.
Good luck with it.
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