All Forum Posts by: Vernon Watts

Hi BP Family

It's a lot of horror stories told here, and many lessons to ponder. Here's my horror story, although just more of a lessons learned.I placed a contract on a house in Oak Cliff, TX (Dallas proper) the owner was asking 110k for a 'shotgun' floor plan, 4 bed, 2 bath, 1720 sqft built in 1957, remolded in 2003. The comps I pulled on the property told me that, the house was worth only 85k. So, I knew going into this deal that I had to persuade the owner to come down off the asking price.

What I discovered was, the owner would not budge so easily, no matter what offer I had on the table, 85k, 87k, 91k all turned down. No matter what the rehabbers were telling him, no matter the differences I outlined in evaluating houses last sold (new, old, or remolded) in the area verse constructed homes sold. He wouldn't budge. So I formed a new strategy, (Although it wasn't quite true)

I told him, you've been trying to sell this house for more than a year now,(true) what have people been telling you about getting the finance to purchase the house? he said, the finance kept being rejected at closing, I ask, do you know why? he said, I don't know the real reason, but it kept happening.(bingo!) I said, I found out why the banks are not financing homes like yours, if houses were built in 1980 (not really) and under, the up keep and liability is to great for banks, and financial institutions to bear. He bought it. 

  Thats when I said, lets do two things, lower your price a little and I'll find people who are "cash buyers" to purchase the house, keep in mind cash buyers were the main ones making offers in the first place I just didn't tell him that. So, he agreed to 97k. But here was where I learned another lesson. An real estate agent brought a client to look at the house and he loved it. Her and I settled on a purchase price of 105k and she agreed to take $1800 for her services, but when the contract was sent to me to sign she had $3000 on the deal. we went back in forth about her scheming, till the owner call me and said take the deal NOW! so, I did.

Lessons learned, Always prepare for a "Hard Sale" before you go under contract, and never agree on "back door" contracts verbally.   

Peter is right, in order to get a full grasp to evaluate this property, more detail is needed. From the information given here, it does't sound like there's any meat left on the bone after purchase and repairs are made.

  The answer to the question; is a house an asset or an investment. Obviously, it's both, and more depends on how you work it to your advantage. Joe' so adequately broke down the "Matrix" of a house being a asset, while others broke down the "long/short term" investment quality of a property, single family or multi-family. I contend also that a house is a asset as well as an investment long team or short. 

   But either way, there's one other thing real estate property is, if you own it. That is, a "Liability" if you don't have the proper insurance to cover what life throws at you, your asset/investment property becomes a albatross around your neck. But that's what makes real estate property so fascinating, how to navigate in the waters of liability, also how come out OK or Ahead.  

Hi Christine

I've read many of the responses offered up to you as a beacon of hope to help you along your real estate journey. They all have nuggets of information for you to ponder, and I'm quite sure have done so already. Allow me to offer up another point to ease your fears, symptoms of panic attacks , anxiety, and unwanted paralyzed constraints. Calm yourself first with prayers, discard the thoughts of others, and know that you are equipped for this journey. I know you are because we have all been where you are now, so calm..... your..... mind.

 Now, contemplate what real estate property is good for ''you'' to start with, a no risk, or very little risk property venture. I started by doing "driving for dollars' type deals, just looking for property in different neighborhoods near me. I only looked for "for sale by owners" signs and makeshift "for sale " signs in the window or yard. Once I weeded out all the agents (I didn't need them running circle around me) I only dealt with the owners. after a few "No's" and you will get them. I found one who allowed me to plase the property under contract and up for sale.

  I sold my first property with no money (outside of business cards and for sale signs) out of pocket, no hard money loans, no bank loans, only a "purchase contract" I sold it 30 days later to a cash buyer. And, yes I operated and conducted myself in the mist of my fears, anxiety, feeling of paralyzation. Sorry I didn't have symptoms of panic :) Have a great time, get out there while you'e yet, in your state of mind. I wish upon you "Unbridled Hope".

I closed on this property back in March, the 28th. The pandemic stopped me in my tracks. but I have another deal in the works. 

I ran into a Hard Sell, but I finally got it to a Pending state. If everything goes well, I should have this property at closing in less than 10 business days.

Hi Michael 

Great deal, and the details of the deal included all the steps that had to be contracted to bring about an awesome outcome. That was some interesting maneuvering from start to finish.  

Hi Ben

Although I can't give any legal advice, the story you just shared make all contract seekers aware of the nightmare you can get yourself in, just by trying to do business in the real world. the issues you just shared will help someone else out down the road in a similar situation. So, thanks so much for the heads up and also, to all the helpful responses shared in this post as well

      Vernon

Hi Andy

Sorry for the late reply, no sir I haven't moved this property yet. the comments that confused you were the "in negotiation" meant I had a offer that I liked and was trying to get the deal to closing, then the owner rejected the sound sure deal. Simply because he thought that he could get more. 

So, I'm back to working on new deals, to take to closing.

  Vernon

Investment Info:

wholesale investment.

Purchase price: $92,500
Sale price: $110,000

3bd, 2bath, total rooms in the house 8. Near eateries and the Dallas Transit Rail System and banks. Great developing area, good for growth.