Posted by Ben in Ohio on April 20, 2000 at 07:09:34:
Before you walk think of Wayne Gretzky’s sage advice
" You miss 100% of the shots you don’t take."
Approach Method - Posted by Matt in SD
Posted by Matt in SD on April 19, 2000 at 17:27:41:
I’m a newbie on the boards here. My partner and I have been reading, learning and searching and we are now ready to jump in. Our strategy is to try to flip a couple of houses and then work our way into investments in single home and multi-unit rentals as we gain cash and experience.
We recently searched a nearby lower-income neighborhood to find a good target and found a dilapidated house with overgrown lawn, terrible cosmentics, ivy actually growing into the a/c etc. We assumed it was abandoned, but after talking with a neighbor we found that an old lady, her daughter and grandson live there.
Now, this home is in the middle of a very nice neighborhood (well kept homes, low-income but not a war-zone, etc.) Homes in the immediate area are selling at $110k - $150k depending on size and condition. The SD market is hot, so most houses are selling in a matter of weeks.
We think it could be a good deal but feel that we need to gather more information and, of course, need to approach the owner. Any suggestions on what information we should get before approaching and how we should approach. This house is not on the market and for all we know the owner doesn’t want to sell - but from the looks of it she has neither the ability or money to maintain the place. We are thinking offering a small cash amount up-front to help her move and secure a new apartment for her family and then sell her on steady income (seller financing) – essentially convert her “asset” into a cash stream for her family.
Any suggestions / ideas are appreciated!
-Matt in San Diego
Another approach… - Posted by Eduardo (OR)
Posted by Eduardo (OR) on April 19, 2000 at 18:43:22:
Matt–
Just a thought here from an old investor. As you know from following discussions on this board, the idea is to first devise a method for finding motivated sellers and then try to buy the properties they own. You need to buy these properties below market value if you’re going to try to flip them. Only motivated sellers (divorce, death, job change, sick of it all “don’t wanters”) are willing to sell a reasonable percentage of properties below market. Some people look for abandoned properties, thinking some of the owners may be motivated. Abandoned properties are often real junkers, however, not worth the expense of fixing them up. Cosmetic clean-up and paint is one thing, new foundation, plumbing, electrical, sheetrock, and roof is something else. Each approach has its own advantages and disadvantages. Other people look for motivated sellers among out-of-state owners. These are just a couple of several methods of identifying possible motivated sellers. But one method I don’t think I would recommend, because statistically I don’t believe it yields a higher than average number of motivated sellers, is contacting owners of owner-occupied houses just because the houses may look rundown. Too much time can be wasted unless one has a specific plan for targeting motivated sellers. In other words, give some thought to putting the emphasis in your approach to finding the right kind of people you want to talk to first, and then check out the properties they have to get rid of second. There are some good courses on how to prospect for motivated sellers available on this site. Good luck. --Eduardo
Re: Another approach… - Posted by Ben (FL)
Posted by Ben (FL) on April 19, 2000 at 20:57:31:
I agree with Eduardo. I consider myself a laid back, easy to get along with kind of guy. However, when I started making sound investment-based offers to people that sounded like motivated sellers but were still emotionally tied to their house, they would hit the roof. People who are emotional about their house get real “p o” -ed at people who don’t agree with them about what it’s worth. Go ahead and make an offer. Maybe, just maybe, you’ll be doing them a favor and they’ll realize it. Be prepared to get ripped a new a-_ole, though.
Re: Another approach… - Posted by Matt (SD)
Posted by Matt (SD) on April 19, 2000 at 22:10:38:
Thanks for the advice. We are actively pursuing various other methods of identifying motivated sellers - perhaps we will make an offer and see what happens, but it sounds like it is not worth spending too much of our time on.
-Matt