Cold Calling: Guy Asked Me To Make An Offer. Now what?

9 Replies

Hi BP,

I cold called a gentleman today who is a out of town owner and he said sure I am interested in an offer. I told him I collect info and have to do the math on it. Every question I asked him: beds, baths, debt, mortgage, house condition etc was answered with "I Don't Know".

I feel like this guy is trolling me but why the heck not make an offer to him?

Beds:3

Baths:2

Redfin says value is 350k. A house(3/2) that sold 4 houses down near the same street sold for 400k. Property Radar says its value is 430 and equity is 250. Zillow says value is 415, realtor says 430, homesnap says 375.

My first thought at an ARV is that it is probably 400k but I am unsure.

Anyway, assuming 400k is the ARV my first offer should be 150k

MOA is 400k(0.7) -60k repairs-20,000 wholesale fee = 200 MOA.

I consider these numbers to be very conservative. I should probably do .75ARV is my thought. 

Thank you for any help

Note: These are not my best estimates. I am just throwing stuff out there quickly so you guys can hopefully fix it better and I can quickly get back to him by tomorrow night.

If you are doing this for exercise great.  He is a tire kicker, or he would have provided you with the necessary information.  If you haven't seen inside you can't say how much repair is needed.

Go getem.

@Cody Evans have you seen the property? First and foremost I would be figuring out a way to view the place. Did you tell him you need to see it, or are you just planning to run numbers as guesstimates ($60k rehab... what is included in that?)? If the owner has no interest or ability to show the property, then coming in with a low offer should be expected. If he shows you the place, than you should be able to narrow down you numbers and get a more solid offer.

Pretty sure its an investor that smelled i was green and just curious.I am just going to see if hes even in the range i need him in before i drive out but then again if he will let me check the house out and give my best shot at estimating then why the heck not take a look. Maybe a roadtrip too. House bought like 8 years ago for 200k

Passive sellers are the absolute worst kind of sellers

How is he going to sell it for 150 if "value is 430 and equity is 250" that means he's 30k short of his loan.

Just throw it out there. If you have a number that you are willing to pay. Throw a number around 65% of that out there. See what he says. He can laugh but if he stays on the phone then maybe he's listening. If not, good riddance. Gonna get a bunch of these types of guys. It's a numbers game. Make an offer to everybody. Most will laugh, hang up or get mad. Don't worry about them. A small percentage will listen and negotiate, or accept. 

Thanks to all,

Sorry I have to do quick responses today.

@Matt K.

My mind does weird things sometimes which is why I always quadruple check the numbers. He bought the house for 190k and it went up in value so he has more equity now. Since the house was bought at 190 the loan would probably be <190. If he has to at least pay off his taxes/debts so he doesnt have to pay money at closing then I figure at least 150 so that is my starting offer. 

@Rene Remington

I can't say what repair is but if he refuses my offer and cant come close enough to it there is no need to estimate all the costs since I no its no deal anyway no matter what; however, since I'm a newb then I guess I might as well take a look.

Originally posted by :

Thanks to all,

Sorry I have to do quick responses today.

My mind does weird things sometimes which is why I always quadruple check the numbers. He bought the house for 190k and it went up in value so he has more equity now. Since the house was bought at 190 the loan would probably be <190. If he has to at least pay off his taxes/debts so he doesnt have to pay money at closing then I figure at least 150 so that is my starting offer. 

 What value does you low balling him offer? Is the house vacant delinquent or something? If not, he has a likely is cash flowing so again why would he want to sell it for so cheap? If you're going to low ball someone you need to be at least realistic and if not you'd at least have to a good reason to explain your price and why it is realistic.  

Plus let's say you do get him to accept something crazy like this how are you closing the deal? What if he tells you all cash, I'll take it... then what? Generally speaking people desperate to sell for so low below market are doing so for a reason and likely face a hard deadline and need cash now and a extremely quick close. The other big problem is they're (if they are smart) going to require proof of funds to even take you serious.

I fully expect most of my offers to be rejected, especially this one, but it is just practice in my eyes.

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