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September 2014

Splitsville

I'll take half a deal any day!


I recently got a call from an old associate. To be up front and frank with you, he is a guy who went through my $10K coaching program back when I did that sort of thing. (I don't any longer so don't worry, I'm not going to attempt to sell you into anything.) So this former 'student' of mine calls me up and has a deal he wants to sell me. I was a bit skeptical at first, but always interested in looking behind the door when opportunity knocks. I'm not one for slamming doors!


The deal he has is a property in the city of Ontario. It is vacant, heavily vandalized and the sellers are ready to sell. He sent them a letter quite a long time ago and for some reason, they hung onto it and decided to give him a call. This makes a great case for never changing your phone number! He said he has an accepted offer at $210K. I comped it out and low and behold, it has a pretty good retail value, somewhere around $325K. I'm no fan of the city of Ontario. Their code enforcement division is relentless to say the least so there was no way I was interested in rehabbing this property.


I called up one of my favorite buyers, and presented the deal to him. He went out took a look and said he could do $225K on that house. Great! We're already looking at a $15K wholesale and since we split wholesale fees 50/50 around here, that is a quick $7,500 to me. However, I don't like odd numbers so much so I called up the guy with the contract and told him to go back to the seller and ask for a discount. The condition is much worse than expected (my buyer was able to get in most likely the same way all the homeless people had been getting inside). I let him know that we'd open escrow right away and if we got a discount on the acquisition price, we could just have escrow adjust the paperwork.


He called me back a few hours later and said they knocked $5K off! Now, we get to split a $20K wholesale fee. Nothing like making a quick $10K just because I answered my phone and knew the right buyer for the deal. Who do you know that can help put a quick 5 figure pay check into your pocket this month?


After we closed the deal and I deposited my check, I started to think about my business and this guy's ability to close. I decided to reach out and see if he wanted to come onboard as a closer for me. He agreed and I just started sending leads his way. Hopefully, this will turn out to be a much more profitable venture than I could have even hoped.