First potential deal ? Looking for advice (long) - Posted by Cathy in SEA
Posted by Cathy in SEA on March 18, 1999 at 17:50:34:
We are waiting for our course material from the convention, but in the mean time a potential deal has presented itself and we would be grateful for any advice.
The house next door is going to be sold as part of an estate by the four heirs who we?ve developed a rapport with. The place will probably comp somewhere between $300K and $350K and it has close to, if not, 100% equity. It is a 2200+ sqft, 5 bdrm, 2 bath, approx. 35 years old in good condition but needs a fair bit of updating. The sellers have likely spoken with a realtor, but the place is not officially listed yet as they are waiting for a green light from the lawyer. If we act quickly, we think there is a potential to present the sellers with multiple offers before they list it, but we haven?t had the opportunity to establish their motivations/needs yet.
Our goal is to get into the property with no cash, and only hold for a short time if there is positive cash flow. Our concerns are that the sellers will not be motivated unless we can present offers that will benefit them financially over just retailing it. (Note: The market is very hot and appreciation in our area is 15-20% or more/yr.) Here?s the offers we’ve been thinking about, depending on their need to sell: all cash and close quickly (we would assign), L/O (we would sandwich lease), some variation of seller financing (we would assign or retail). Are we on the right track? Any advice on how to structure the offers?
By taking the realtor out of the picture we expect to be able to at least preserve the commission in the cash or possibly financing offers, even if they are only marginally motivated sellers. If so, would that leave enough potential profit to make a deal worth while to flip to another investor?
MOST IMPORTANTLY, since Ron LeGrand said at the convention that the words we choose will make or break our business, any suggestions as to how to present these offers so that the sellers won?t want to turn us down (e.g., benefits to the seller that us newbies might not be aware of)?
-Cathy and Mike