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Real Estate Investing Problems Solved!

 

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April 2015

you might not get them the first time

The most wonderful thing about real estate is that eventually, it must change hands


A seller contacted my office in April 2014 about a small house he was looking to sell. With just one bed and one bath, it was only 540 Sq/Ft. At first, I thought it might be a good start for a Ward Hannigan Ding-Bat Retirement Plan (renting one bed, one bath houses to senior citizens). We had a great conversation and he told me it was a 7 out of 10 on the condition scale. I was under the impression that 10 was a score as you might see in the Olympics. I made him an offer and said if in fact it was in the condition he stated, I could close in a few days, but I'd need to verify it. We agreed to meet at the property a few days later.


Well, I was definitely wrong on which end of the scale stood for outstanding. On my scale, this house was a 3 out of 10. Maybe a 2!  What a dump!! It had a converted garage, missing wall heater, missing water heater, broken and boarded up windows, the list goes on and on. He did have 2 guys out there working on the property and I was curious why he had a crew out there if he was intent on selling to me. I called him the next day and informed him that the condition was much worse than he stated (and he knew it) and therefore, I had to revise my offer to cover the unexpected expenses. Well, things seemed to fall apart and quite frankly, I wasn't that disappointed.


Fast forward to 8 April 2015 and the seller calls again. This time, he has an urgent reason to sell and asked if I'm still interested. I checked comps and sent him my offer. Now, I was under the again wrong impression about the condition. I never imagined he hadn't done anything to the property in the last twelve months, but that is just what happened, or in this case didn't happen. He left it boarded up and didn't do a thing! I learned this when my contractor went out to write up a proposal for me and sent me pictures. 


Well, history repeats itself and I called the seller up to ask about the condition of the property. He confirmed that he only boarded up the rest of the windows and hadn't done anything with the property over the last year. Luckily, the market has gotten better and the house has appreciated since we spoke a year ago. I told him we needed to renegotiate the price and we came to an agreement. Escrow closed and my crew is diligently working to get the property ready for market.


When you're dealing with a seller, he/she might not truly be a seller TODAY, but that doesn't mean you shouldn't build rapport and establish yourself as the go-to-person when the time is right for this seller. Never think that just because he/she stopped communicating with you that the deal is dead. Life happens and there could be millions of legitimate reasons why selling a house goes on the back burner for a seller. Just keep on it and do your follow up. In time, all real estate changes hands.


Feel free to head over to my blog or leave any comments below.