Bad Crdit and Bad Background (Tony!, Lonnie!) - Posted by S.Canton

Re: Running the numbers backwards - Posted by Ryan (NC)

Posted by Ryan (NC) on March 07, 2006 at 21:53:23:

I?ll agree that Lonnie?s one-handed math is hard to beat for simplicity and it works great!

As Tony pointed out I like my Calc and I tend to use it in negotiations… (Guess that’s the numbers guy in me coming out) Mr. Seller, What’s your absolute best cash price if I can get you the money today… wincing Punches buttons on the calculator… shaking head You’re absolutely sure that’s the best price you can do for cash if I bought it from you right now as-is without you making any of the repairs?
Waits for an answer…

After typing that I think you can call it dramatic effect but I know exactly where I stand and it seems to get the sellers attention. Like I said it’s not a one size fits all approach but this keeps me happy and Lonnie?s one handed math will work much better for others. Different strokes for different folks, so long as deals are being made the end results about the same.

Best wishes,
Ryan Needler

Fixing as buyer directs - Posted by Tony Colella

Posted by Tony Colella on March 08, 2006 at 08:43:02:

In my opinion this is a terrible idea. Every time I had work done with a buyer’s input (however little) they later (usually much later) complained and tried to use excuses such as “that pattern was not what I wanted” for not paying.

We are not contractors and would likely not charge enough to become contractors. We put in what we put in, inexpensive but durable products (carpet, linoleum, etc.)

Sell her a great deal on payments and let her put the carpet in etc. This way when you get the home back she has paid for the improvements.

Make the home safe and if she wants her own carpet etc. just leave that out. You still finance the deal the same, just lower expenses.

I also find that many of these folks get a tax refund and think they are overnight millionaires. They get all kind of demanding but 2 months later they are broke and cannot make the payment. Don’t cater to this.

Stick to making your money as a Lonnie dealer and let her hire contractors. This will also keep you from having to go back out every time she finds a wrinkle in the carpet etc.

Tony

Re: Running the numbers backwards - Posted by Tony Colella

Posted by Tony Colella on March 08, 2006 at 08:33:36:

Bobbie, we all make mistakes and using Lonnie’s system, still make a nice profit.

As you wrote, Lonnie’s system of paying no more than 1/2 of what you can sell it for (or in my case I paid 1/3) is pretty simply BUT you have to remember that is the total price to you, including fix up!

No problem so you made a mistake. Next time you won’t. But with Lonnie’s system you did not compound the problem with trying to compute higher math to come up with that price.

Do whatever works for you but your posts read like how I work. Keep it simple. If you can forget to account for repair costs, keep it simple to protect yourself. I do this proudly.

Honestly, once you buy a few deals, you will know your market. I could walk up to any home and know that my starting point was $3k MINUS repair costs. If it needed a grand worth of repair, my highest price was $2k. FROM THERE I used Lonnie’s negotiating techniques and usually paid a grand or less but sometimes more (but never more than my max price after repairs). By the way, most of the sellers started out asking $6k.

Don’t limit yourself with 1/2 price is best. Use the techniques Lonnie teaches and you will be amazed at how well they work.

Tony

Re: Running the numbers backwards - Posted by Michael(KCMO)

Posted by Michael(KCMO) on March 08, 2006 at 07:49:01:

I wouldn’t be opposed to fixing up to her specifications as long as they were in line w/ what you had in mind to do anyway. I would CERTAINLY make sure I got her FULL $5,000 dn pmt up front, though. If she walks and leaves you holding the bag, I want the bag to be full of what WAS her money.

By the way, Bobbie, if you’ll send me an email I’ll send you back a worksheet I developed when I first started this business that I used to figure my maximum purchase price. I would just email it to you, but for some reason my browser/computer won’t let me do that from here.

Regards,
Michael(KCMO)

Re: Fixing as buyer directs - Posted by Bobbie

Posted by Bobbie on March 08, 2006 at 11:58:13:

Hi Tony,

I agree with you. We had a long, hard talk last night about this. We came to the same conclusion as you mention.

We ARE fixing the roof because when we showed it yesterday, we found more water damage. We’d rather take care of this problem now, than have a buyer in there who doesn’t do any roof repair and we get it back in WORSE shape. We aren’t going overboard, simply patching the edges and some rough spots.

Like I mentioned, IF she gets approved and IF she signs an agreement and puts a non-refundable deposit down, we will paint the interior all white (simple job with sprayer–non-smoking unit).

I like the idea of letting her choose her own carpet and contractor and having her pay for it.

I’m going to re-think this whole deal before moving forward with this prospective buyer.

Your input and advice is GREATLY APPRECIATED,
Bobbie :slight_smile:

Re: Running the numbers backwards - Posted by Bobbie

Posted by Bobbie on March 08, 2006 at 12:16:51:

Yup ~~ you are definitely right on the money.

Started off doing very good ~~ then the BIG ADDICTION HIT and I started falling off the wagon. I was doing fine on the negotiations until the seller mentioned she had an offer from the PM (the ones who are trying to undercut us), that I jumped in with the extra $500. Normally I wouldn’t have purchased at the $7,000 but greed and spite got in my way along with emotions. Just goes to show you, when you deal with this type of thinking, you usually pay for it in the end. Trust me, it won’t happen again.

So we lick our wounds and get back out there to find the next one. I’m sure with more experience, more time on the board learning from others, I’ll be better equipped.

I’m confident that I know our market (especially this park). I just need a good 12-step program to keep my foot out of mouth and emotions in tack and play the game the way Lonnie instructs. His system works great if you work it.

Good advice Tony!
Thanks,
Bobbie :slight_smile:

Re: Running the numbers backwards - Posted by s. canton

Posted by s. canton on March 08, 2006 at 18:58:55:

Hi Michael…I am still in the learning stage and waiting for my DOW. I was wondering if you wouldn’t mind e-mailing me as well that worksheet to figure out maximum price. It would be helpful. a_purpleturtle@yahoo.com

Re: Running the numbers backwards - Posted by Bobbie

Posted by Bobbie on March 08, 2006 at 12:30:21:

Hi Michael,

OH BOY! I like the idea of the FULL deposit. Was thinking of taking half, but FULL sounds much better. If she’s a serious buyer, this shouldn’t be a problem, right?

We had a good talk last night and are re-thinking this whole deal. Originally we weren’t going to do any rehab and simply sell it as is. After showing it yesterday we found some big water leak damage. Hubby repaired the roof this morning (for US, not the buyer). We have decided IF the prospective buyer jumps through OUR hoops, we will do some rehab, but not everything she is requesting.
Tony had a great idea to let the buyer handle the carpeting and costs. She also wants the stove moved to a different wall to make more space for a table in the kitchen. Hubby says it a simple fix. I say, it costs more due to time and materials. Like Tony says, if she wants this ‘extra’ done, she can hire a contractor and pay for it – not us!! I’m liking this :slight_smile:

I think the best bet is to make it safe and presentable and sell AS IS for the rest. No carpet to be added. Keep the terms good and an appreciative buyer will come along.

It’s important for us to remember that this is our house and we are in control – not the other way around. I get anxious and want to jump on the first buyer that seems interested. Not good business practice. This will be nipped in the bud from here on out.

I’ll email you directly for your worksheet. Thanks so much for sharing this with me. I look forward to receiving it and using it.

Many thanks for the good input,
Bobbie :slight_smile:

Re: Running the numbers backwards - Posted by Todd (AZ)

Posted by Todd (AZ) on March 08, 2006 at 15:47:49:

Good job Bobbie…you’re learning and applying which is sure to serve you well in the future. About the fix-ups: I just got a call from a buyer from last month. I asked her how everything was going and she said she has pulled out ALL the carpet in the home and is soon to replace it. I can’t tell you how relieved I am to hear these things. My last 2 “as is” homes are in much better condition than I sold them which is GREAT since I’m not a handyman kind of guy and have little interest in becoming one. If/when I get these back it will be (hopefully) like winning the lottery in that they come back BETTER. Keep up the good work. Todd (AZ)

Done (nt) - Posted by Michael(KCMO)

Posted by Michael(KCMO) on March 08, 2006 at 19:21:59:

Really, no text!

Re: Running the numbers backwards - Posted by Tony Colella

Posted by Tony Colella on March 08, 2006 at 18:11:03:

I would not recommend moving the stove for the buyer. The stove electical wire is of high AMP and the size can get expensive (especially if you hire it done) but more importantly if you do it yourself, the seller will know and leaves open the door for the same old game and liability exposure.

Again, “no problem mam, once you sign the purchase agreement and promissory note, the home is yours to do with as you please.”

Letting tenants or buyers know or see you doing electrical work is not recommended. Again, let her demanding self pay for it after she buys.

Tony

Re: Running the numbers backwards - Posted by Bobbie

Posted by Bobbie on March 08, 2006 at 16:18:37:

Hey Todd, Thanks for the encouraging and uplifting post. How sweet it is that your buyer is replacing the carpeting for you. Time will tell for us whether our tenants do any updates or improvements. I’m keeping my fingers crossed, but not holding my breath.

YOU have a HAPPY day,
Bobbie :slight_smile: