ED, NEED ADVICE - Posted by FREE SPIRIT

Posted by Ed Garcia on December 30, 2000 at 12:16:41:

Free Spirit,

In answering the first part of your post. You start out by saying, ?(My neighbor passed away recently he was elderly, family (son and daughter) both live out of town. Great property valued at around $160,000. Asking $155,000. But I believe they’ll sell it cheaper.) You sound like you know your neighbor and then you say?. (Because it’s right next-door to me. How do I approach the seller thru the broker with the deal? Or should I find out who the seller is and approach him myself. I NEED TO MAKE A NO MONEY DOWN DEAL WITH THE SELLER.). Do you know them or not? I guess what you are saying is that you don’t know the son and daughter?

Free Spirit, If the property is listed, then go through the broker. They’re getting paid to handle this deal any way. Once a broker is involved, you have to live with them, so that’s as good as place as any to start. If it’s not listed, then speak to who ever is taking care of or renting the house. If the house is vacant, then send a letter to the neighbor, and I’m sure it will get forwarded to the son, daughter, or who ever is handling your neighbors estate.

For the second part of your question, (How do I approach her?), You go to the house and knock on the door. Again there is an agent involved, she may refer you back to her agent, but it’s worth a try and a good experience for you. (( Any time you can work directly with a buyer or seller you have a better chance of getting the deal that you want.))

Free Spirit, I would go through the agent on the first deal. The reason is because you don’t know how long it will take you to contact the seller, and meanwhile the agent is out trying to sell the house. There may be some complications in the deal because of the recent death.

Free Spirit, we haven’t talked much about the buys, so I want you to know that the first 10% of a deal is AIR?.it covers discount and commission. Knowing that going into the deal for $207,000 the property is only worth $186,000. Remember?. you make your money on the buy?. You’ve given us a range from $180,000 to $1,500,000. Too much of a spread for me to calculate from California. You talk about redevelopment and building two homes on it. This sounds like an upper side residential area, and may not necessarily pencil out for rental properties. Especially after building a new dwelling. My suggestion if for you to have a game plan no matter which house you buy. I feel your tire kicking. Your numbers are not well thought out and you’re guessing.

I realize that this is all a new experience for you and I’d like to recommend that you read the How-To Articles on this site. I have an article there titled (Making Money When You Buy)

Good luck Free Spirit,

Ed Garcia

ED, NEED ADVICE - Posted by FREE SPIRIT

Posted by FREE SPIRIT on December 29, 2000 at 13:17:01:

Hi Ed,

I really need your advice on two seperate deals. I’m new at real estate investing. So far I’ve made several offer’s none accepted. But, I’ll continue to make offer’s until I make one happen. Anyway, I have two new opportunities and I’m not sure how to approach them:

First: My neighbor passed away recently he was elderly, family (son and daughter) both live out of town. Great property valued at around $160,000. Asking $155,000. But I believe they’ll sell it cheaper. It’s listed with a Broker. I’m interested in buying and flipping it. Or buying and selling it (my own seller financing) I guess it’s considered a wrap around mortgage. Because it’s right next door to me. How do I approach the seller thru the broker with the deal. Or should I find out who the seller is and approach him myself. I NEED TO MAKE A NO MONEY DOWN DEAL WITH THE SELLER.

Second: A women is selling her home which has been on the market now for almost 2 years. I looked at it myself when I was house hunting for my own personal residence. It need’s some work, but it stand’s on a very large lot and is in the middle of a neighborhood which sell’s homes anywhere from $180,000 to $1,500,000. You could even redevelop the property and build two homes on it which would sell for at least $180,000 to $300,000 per property. I’m very familiar with the price ranges because I live in this community. Her husband died a few years ago and she’s all alone. She originally was selling the property for 185,000 two years ago now she has it listed for $207,000. By the way, she’s selling it herself and still lives in the property. How do I approach her?

Any advice would be great. Also my credit is average because of high debt (ratio’s high) but not bad. So I can’t get financing thru traditional lenders.

Thanks in advance.

FREE SPIRIT