Doing deals is a marathon, not a sprint, and it requires perseverance. Just because a deal went under contract or off the market doesn’t mean you lost it. Many times the deal comes back, but ONLY after you stick with it until it actually finally closes.
I remember clearly one of my house flips: the seller was older and looking to divest himself of his rental property which needed work. But his greed got the better of him, and he hired an agent to sell his house, wanted too much money and couldn’t sell the house. He switched agents and tried again with the same predictable result. Then the tenant moved out, and the sudden loss of income gave him the necessary motivation to reconsider.
I had stayed in touch with the owner, and I called him every couple of months to see how he was doing. Finally he called me and said, “Let’s do a deal. But I want all cash and no hassle!” That turned out to be one of the best deals I’ve ever done. But the entire process took about 9 months!
Stories like this abound. I was speaking with Chris Urso on a recent podcast, and he had a similar story. Chris is a successful multifamily investor with several hundred units under management. He said one of his best deals came back to him after it had been under contract TWICE before he got it.
Another investor friend of mine told me a story that was incredible. He was interested in a piece of land to re-zone as commercial and to develop. He made an offer but was overbid. The closing fell through, and then something happened between the seller and the listing agent that resulted in a lawsuit, which took TWO YEARS to resolve. He had stayed in touch with the seller, and once the dust settled, they did the deal, and he got the parcel 20% below his original offer price.
The lesson: Stick with the deal until it closes. Because it ain’t over til it’s over.
Here are two practical tips for “sticking with it.”
Tip #1: Keep Records and Notes of Your Deals
I often can’t remember what I did last week, let alone a deal I looked at a month ago. To combat my memory fatigue, I keep all of my files in a Dropbox folder (you are using something like Dropbox, right?). In that folder I always have a file called “Notes.doc” where I record my analysis, site visits and interaction with the seller or broker.
When the deal is a little more complex (like for apartment buildings), I even create a recording of my analysis using my deal analyzer (using Jing, a free desktop recording tool). When it comes time (like 4 months later) to crack open the deal again, I watch that video first to quickly get me up to speed.
Tip #2: Schedule Regular Follow-Ups With the Seller or Broker
Add to your calendar the next time you should follow up with the seller or broker about the deal. Depending on the situation, I would do this every 2-4 weeks. Perhaps alternate sending an email with a phone call.
Your goal is to stay informed, but also to be front-of-mind with the seller so that if something changes (like the closing falls through), you’ll be one of the first people they will call.
Don’t ditch a deal just because it’s under contract. Keep careful records for each deal and stay in touch with the seller or broker until it actually finally closes. If you make this part of your investing discipline, you are sure to reap HUGE rewards.
I’m sure you have some stories — so let us know about a deal that came back to you after it seemed like a goner!
Be sure to leave a comment below!