Winston Salem, NC · Member since 2015 · 52 posts · 5 votes
An older gentleman responded to my cash for houses bandit sign. He states that he has 6 properties that he is interested in selling because he and his mother are unable to manage them. We are scheduled to meet and I would like advice on how I should approach potential deal. Any advice and/ or suggestions are welcome.
A lot of times when investors are selling multiple properties at once like that you get really good deals. I would check how much each unit rents for and do your basic rental equation for each income-expenses=profit (calculate in unexpected expenses as well). I would imagine the numbers are gonna look pretty good since it's gonna be a volume sale like that.
Excellent, I agree with Simon. Stay with your same script ask the same questions and check out all the houses. You might want to mention that if you're going to do all the deals maybe a little discount pricing for volume.
To gauge his motivation further ask "ideally, how soon do you want to sell? 6 months, 12 months"? If he is truly motivated he will tell you he needs to sell much quicker than that and hopefully give you a time frame.
I also like to get an idea of how much they feel the houses are worth. If you get a number, see how they came up with it (appraisal, BPO, Zillow, best guess, etc). Often times their idea of value is far from reality.
Ask how much he wants for each one? Then see if he has a price in mind for the package. If he gives you prices ask "If I could close pay all cash and close on the date of your choice, what is the lowest you would accept?" Sometimes I'll even ask if they can do any better than that.
Find out about the tenant situation on each home. How long have they been renting for? How much are they paying? What type of leases are in place and when are they ending? When was the last time they raised rents if at all?
Ask about the condition of each property. More specifically ask, "Has there been any updates in the past 7 years?" "Do any of them need any major repairs?".
Hope this helps you out.
You got this! Sending good vibes your way so you can lock those up.
@Terrance Merck first let me say congrats on a great lead! I think the guys above did a great job with questions to ask. I usually also ask:
Why are selling at this time? What are you going to do with the property if it does not sell? Are you current on your payments (if they aren't owned free and clear)? Do you have a number that you are looking for? How did you establish this price? Have you talked to anyone else? Have you had any offers?
A bit off topic but I just thought I'd mention, 6 properties is a lot of information to record and digest. Do you use any kind of a lead sheet? I use a standard form when I talk to any seller. It helps me to keep the dialogue going in a productive manner and makes sure I gather the important info I need. I would want a sheet on each property. This should give you the basics so you can comp the properties out and have a general idea of value. If it were me, when I went to see the properties I would have that original sheet, a note pad and a camera. I would also be filling out my other favorite standard form, the repair estimator. No matter what you strategy is in this deal, you have to know the value, the cost of repairs and be able to remember which property is which! Who knows you may want to wholesale 2 of them, flip 2 and hold 1 to rent and make the other one your primary residence! In all seriousness, this is an amazing opportunity! I'd want to make sure my seller is confident in my ability. I think it is essential to be as prepared and professional as possible.
That's the problem with a lot of the "training" out there. It tells you how to advertise for leads but tells you nothing about what to do when you get them.
@Terrance Merck it's hard to give you a good answer here because what you really need is a business system not just some piecemeal tactics. What I mean by that is okay, you have some questions posted here to ask, but do you know what to do with the answers?
You can find property all over the place. What you need is a deal, which means you need a methodology for figuring what is a deal and what is not. Not every property for sale is a deal.