Use the resources you have to find the resources you need!
In early June I had a call come in from a woman who lived on the east coast. Now, I didn't know she lived on the east coast because when she called, she listened to my voice mail and then hung up. That makes a great case for having your phone calls answered live! Since I had her caller ID info and found her in my database, I decided to check out the house before I called her back.
Based on my research, I noted that it needed a new roof, looked like it had a one car garage converted to living space (almost always without permits), was 60 years old, sat on almost 1/2 acre lot (I do not like rentals on big lots), and has 2 bedrooms and 1 bath. I estimated the value at about $130K and figured since I didn't want to keep it or flip it, the most I could pay for the property was $75K and still be able to squeeze a wholesale fee out of it.
I finally got the seller on the phone 3 days later. After discussing the situation, and learning that she also thought the house was worth $130K, (Dang you Zillow!!), I gave her my $75K offer, but she said "Not at this time." Knowing her situation isn't going to change, I put her on a one month follow up.
I called one month a few days later. I got some more information out of the owner regarding the occupants and then she told me I offered her $80K when we last spoke. I looked through my notes and couldn't find anything about that. $80K is what I expected to wholesale the property for so if I bought it at 80K, there wasn't going to be a pay day in it for me. I told her I had to rerun my numbers and I'd call her back the next day.
When we spoke the following day, I reiterated that my offer was $75K and I couldn't possibly pay any more. After hemming and hawing a bit, the reality of her situation set in and she accepted, so I opened escrow. I immediately sent the deal out to one of my preferred buyers for this area. He thought the numbers were too tight and asked if I could get terms. If I could get terms, I'd probably just keep it myself! I sent the deal out to 5 other buyers that have recently contacted me about selling them a house. After a few hours of not hearing anything back, I knew I had to do something different than rely on my network.
I pulled up the MLS and ran a 1 mile search for closed houses within the last 150 days. I was primarily looking for any house that sold twice. That would be an investor purchase and flip. I also checked title on some of the closed transactions to see who the buyers were. It didn't take me long to find an LLC that had recently purchased 2 houses nearby. I looked on title to see what was listed as the mailing address. I then Googled the company name and I used Google maps to check out the mailing address. Within a few minutes I had a phone number.
I called and asked to speak to whomever was in charge of acquisitions. I got a nice guy on the phone and asked if he ever purchased wholesale deals before. He said "Yes," but by the tone of his voice, I was a bit unsure. We talked about the deal for a bit and he gave me his list of demands; we had to use his escrow, he needed to do a walk-thru on the house, he wanted all the occupant info before close of escrow, but he said he had cash and would close on the date I put in my offer.
We had a few minor road bumps, mainly with his escrow lady and a 30 year old lien with no recon, but in the end it all worked out well and I collected the $5,000 wholesale fee I knew was in the deal. The buyer actually got a 3 bedroom 2 bath house because there was a fairly nice addition on the back. Also, the tenant has a good job at a local big chain supermarket and wants to stay, so it worked out well for both of us since the buyer said he was going to hold the property. If you get a property under contract and are not sure who to sell it to, just check out who is doing business in the area and see if he/she/they are interested in your deal. I got the wholesale fee I expected, but more importantly, I now have a new relationship with a very strong buyer.
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