Posted by Emy on July 05, 2002 at 17:36:43:
No, I did not tell them that. If I did I would think they would hang up on me. I just simply answered their questions, gave them a description of the house, the location and asked if they would like to make an appointment to see it. They then told me that they would pass by and call me back or they said something like needing a bigger house, different location, or it was too expensive.
I Made a Big Mistake, Please Help - Posted by Emy
Posted by Emy on July 03, 2002 at 22:46:21:
I really need help out of this one. This was my first deal and already I screwed up. If anyone can help me out of it I would greatly appreciate it. Here it is:
L/O for two years. $1200 per month with nothing going to purchase price. I put $500 down. The first payment will be on the 15th for July the next due on the 1st for August. The purchase price is $120,000. The market value is between $110,000 and $131,000. It is a 3/2/1. 1309sq.ft. Living/Dining room, eat-in kitchen. Located in Kissimmee Florida (near disney), the house is single family 7 years old in a subdivision with a home association with a new subdivision started right behind it. The address is 3247 Brewster Dr.
Can anyone help me out of this or tell me how to get out of this. I put an ad in the paper and I only had two showings to sub lease/option.
Re: I Made a Big Mistake, Please Help - Posted by Rob FL
Posted by Rob FL on July 04, 2002 at 12:27:16:
Advertise more. Sometimes it takes more than one ad. Make sure you put the basics, bed, baths, price, address in the ad. If you need to do something now, put in something like 3K moves you in. Get a sign in the yard. Send a mailout to the neighbors.
This Ain’t Vegas Baby! - Posted by JohnBoy
Posted by JohnBoy on July 04, 2002 at 09:28:38:
In your post you say you screwed up and need help to get out of this. But you don’t say where or how you screwed up. You only say you haven’t found a buyer to sublease option to, that you put $500 down, with 1st payment on the 15th and next payment on the 1st of Aug.
And???
Where did you screw up? Why do you need help to get out of this?
Based on your post I can only “assume” what you mean about screwing up and needing help out of this.
What I “assume” by what your post says is that you planned to sublease option the property where you thought you would find a buyer right away and that you don’t have any money to cover any of the payments coming up where you NEED to find a buyer in time just to cover those payments!
Is that the right “assumption” I have?
If that is the right assumption then tell me the lesson you learned from this and how you will avoid this from ever happening again in the future???
If this is the wrong assumption I have then tell us where you screwed up and why you need to get out of this?
Re: I Made a Big Mistake, Please Help - Posted by Jim FL
Posted by Jim FL on July 04, 2002 at 24:11:17:
Emy,
Sounds like you REALLY NEED to move this house, and NOW!
Instead of getting out of the deal, make an effort to get a buyer.
Get your ads in the paper NOW, signs out at the house, in its windows, directionals to it, around town, flyers EVERY WHERE you can, (Walmart is a GREAT place to advertise.) and anywhere else you can get the message out on this house.
When you make up marketing materials, make sure they say things that CATCH the readers attention.
Something like:
RENT TO OWN
BAD CREDIT OKAY
ONLY $2-3k MOVES YOU IN!!
Nice 3/2-Kissimmee
Available NOW!
xxx-xxx-xxxx
Make the flyers on nice paper that catch their attention, like White paper with a color photo, and color text to catch them, like red and blue.
Or
Bold black letters on flourescent color paper.
Make the signs verbage the same.
Hold open houses this weekend, a lot of people will be around driving the area then.
Does it have appliances?
If so, highlight in the flyers you place in front of the house, on bulletin boards, and the sign in the window, “FREE APPLIANCES!” as well as the other info above.
Granted, $2-3k is not a lot, but better than losing the deal.
You may also want to talk to the seller while doing all this.
Explain your trouble marketing the home, and perhaps offer to extend them something in exchange for covering another payment or something?
Refer them to a good re broker.
Some other ideas:
Contact local mortgage brokers, real estate agents/brokers and tell them you are looking for a T/B’er, and will pay them some of the option money collected for a lead perhaps.
Offer it “For rent” only, just to cover the mortgage payments?
Maybe a short term rental for the summer to stop the bleeding?
Send it to a vacation rental company?
They might be interested in taking your deal via an assignment?
Go get your message out to rental communities, post it in laundry mats, apartment and condo rental complexes.
Send it to human resource departments for larger businesses in the area.
Get the word out NOW! and BE LOUD!!
Tell all the neighbors in the area about the house.
A flyer titled, “pick your neighbor”, and tell them you will take any referals they have and all offers are considered.
Get to work, and make this THE ONLY THING YOU DO for the next week!
There are buyers out there.
I just sold a house there, and frankly it took longer for me as well.
That market was a real pain.
But, when we began naming what we’d take down, we got a larger response, along with a TON of marketing materials we placed out with it.
Good luck,
Jim
P.S. Post it online on as many FREE classified websites as you can find.
You’ll be surprised by the number of e-mails you will get.
We get a TON that way, because TONS of people from all over want to move here to this GREAT state!
Go get em!
Re: This Ain’t Vegas Baby! - Posted by Emy
Posted by Emy on July 05, 2002 at 17:31:01:
You have the assumption right. I learned alot from this. First, learn to negotiate better. I got him to lower the purchase price but at the same time he raised the monthly payment. I should have just said that was too high and walked away. Originally we had an agreement for me not to pay until the 30th but then he changed his mind before we were going to sign and wanted it right away and I told him how about the 15th. Again I should have walked away. But I made mistakes and now will learn from them. I called him and asked him to lower the monthly payments and he said he would if but he would higher the purchase price. He said that if I can find someone to take over the lease that he would release me from it, but I can assign it anyway so that does not make any difference to me. My best bet right now it seems is too advertise, advertise, advertise, and pray!
Re: I Made a Big Mistake, Please Help - Posted by Kristy
Posted by Kristy on July 04, 2002 at 24:59:49:
I just wanted to know, before you got into this deal, did you run any ads in the paper just to see how many people would call you on L/O and how much they could pay per month? I haven’t done any L/O yet, however, before I considered it, I ran a ghost ad in the paper for one weekend to see how many calls I would get and what kind of down and monthly payments people would have. After running that test, I knew what the best price ranges were to go after and what kind of monthly payment I should get one the deals. Now I am going after motivated sellers.
Re: This Ain’t Vegas Baby! - Posted by JohnBoy
Posted by JohnBoy on July 05, 2002 at 20:46:37:
You say you are not worried about him releasing you if you assign your contract because your contract allows you to anyway. Your contract may allow you to assign, but that won’t release you from liability. You NEED to have the seller sign a release releasing you from any future liability. Otherwise if you just assign your contract and if the buyer you assigned to was to default, the seller can still hold you liable for the contract. Just because you assign it and just because your contract allows you to assign it, that doesn’t mean you are off the hook and automatically released from future liability. That is why you need to get a signed release of liability from the seller when you go to assign your contract. That way the seller can’t come back and hold you liable should your buyer you assigned to defaults!
The lesson you should have learned is that if you don’t have the cash to cover the payments then NEVER commit to making them in 30 days, 60 days or any days! Instead, you set the deal up to where your payments start SUBJECT to you finding a suitable tenant to place into the property within 60 or 90 days. That way if you don’t find someone within that time you can just void your contract and walk away. Since your contract is SUBJECT to you finding a suitable tenant to place into the property you never have to commit UNLESS you find someone within that time.
If you CAN cover the payments if you had to and you were willing to commit to that then structure the deal to where the seller MUST make the next 2 - 3 payments before your payments are to begin regardless if you find someone or not.
Now in SOME cases a seller may not be able to make any payments. Then you may have to commit and start making the payments right away. But only do this under two circumstances. First and foremost. YOU MUST be able to cover the payments if you can’t find someone. If you can’t then don’t even consider the deal! Second, if you can commit then only do so IF the deal is a GOOD deal for YOU to where you having to cover some payments out of your pocket is well worth it because you are getting a chunk of equity from the deal. Otherwise don’t do it! You don’t ever want to let a seller’s problem become YOUR problem! So always make your profit when you buy!
As for the deal you have now, yes! Advertise the hell out of it! Do what Jim was telling you to do.
Re: I Made a Big Mistake, Please Help - Posted by Emy
Posted by Emy on July 04, 2002 at 01:22:02:
I ran an ad and got tons of calls but in most of the calls the people wanted a bigger house, like 4 bedrooms. So I think that I am going to do 4 bedrooms from here on since the market is bigger for that. Also I find that there are a lot of people that would rather L/O than buy because of their credit and they have lots of money but don’t want to spend it all in monthly payments or a purchase price. I say “Beggers can’t be chosers” but they don’t care about that saying.
Re: This Ain’t Vegas Baby! - Posted by Emy
Posted by Emy on July 05, 2002 at 22:06:21:
Thank you so much for your great advice. I have read about everything you said but until I made this mistake and read your advice and explanation did it all come together for me to know what to do next time in the same situation. I have read and learned so much but I don’t know how to use all of the information. The way you explained it was very cut and dry and was directed toward my problem. Thank you so much.
But one more question now. I hope this does not sound like a stupid question but should I post the flyers or put a bunch in a pile laying where people can pick them up and take one with them? Also does anyone know where I can get signs cheaper than at Home Depot? The bandit signs are $20. Also my uncle had told me not to put any money into the house. The house is nice and new looking but the carpets are awful. Should I change the carpet and the mulch in the front to make it more attractive to buyers?
Thank you again so much. I can’t thank everyone enough for all the advice I have recieved. Thank you.
It might be your wording on the phone… - Posted by Nathan(Oh)
Posted by Nathan(Oh) on July 04, 2002 at 23:33:14:
give me an example of how you respond to buyers and I might be able to help. Saying things like “beggars can’t be choosers” will probably make them more mad than anything, but there are ways to get them in the door.
Nathan
Re: I Made a Big Mistake, Please Help - Posted by Kristy
Posted by Kristy on July 04, 2002 at 03:04:31:
Do everything that Jim has said, plus run that ad for an ENTIRE WEEK, stating that it is a 3bedroom. That way you will be attracting people lookng for a 3 BD.Try using the caption NO QUALIFYING. Make sure you include the monthly payment so you get only people that can spend that much. Sounds like you had good response when you ran your first ad. If it starts getting close, talk with the sellers and let them know you need some extra time. Bargain with them. "Give me this much extra time and I’ll give you $___ amount when I get the Tenant/Buyer. Then raise your downpayment by that much to your Tenant/Buyer. Best of Luck, let me know what happens…
Re: This Ain’t Vegas Baby! - Posted by JohnBoy
Posted by JohnBoy on July 07, 2002 at 12:44:26:
Having awful carpet can be a draw back. But instead of paying money to replace the carpet use it as a tool to promote the property.
CHOOSE YOUR CARPET COLOR!
Offer to replace the carpet by offering the buyer to be able to choose their own color!
Then add the cost of replacing the carpet to the amount of your option consideration where you can collect enough from your buyer to cover the cost without affecting your original profit on the amount you wanted for option money to begin with.
Example:
You want at least $3k option money.
Carpeting will cost, say, $2000
So now you set your option money required to $5k and the buyer gets new carpet that they can choose their own color from preselected styles you picked out that will cost no more than the $2k you wanted to spend. Then IF the buyer wants a better grade carpet they can pick whatever they want where you will pay UP to the first $2k and anything over that they will hve to pay for if they want something better than what styles you have picked out that fall within the $2k price range you were willing to spend.
Then USE this as a tool to sell the property quicker!
Lets say you have a buyer that doesn’t have the full $5k for option money and only has $3,000 - $3,500?
Then say something like, well, I need to have a minimum of $5k option money, especially since I’m putting NEW carpet in the property. If you were to end up defaulting on your agreement then I may have to pay to replace the carpet again costing me a lot of money in the end. But if $3,000 is all you have for option money I would consider taking that if you are willing to forgo the new carpet and take the property “as is”.
Guess what 99% of the people are going to say??? Heck, I don’t care about having new carpet! For $2k in savings I’ll just take it “as is” and I’ll replace the carpet myself later if I want it!!!
See my point? Use it as a selling tool that you can use to negotiate with. If you got the full $5k I’ll put in new carpet and you can choose your color! If you can’t come up with that much then I’ll take $3k if you are willing to take the property “as is”!
If you originally wanted $5k in option money, then set that at $7k offering new carpet. Just add $2k or $2500 or whatever it will cost for new carpeting to your original option money you wanted and use it as a bargaining tool to attract buyers. Those with the cash that want the carpet, no problem! It’s their money you are using to buy it with! Those that lack the full amount of option money you need to cover the cost, no problem! I’ll let you have it “as is” and take less option money just so you can get into the property! Only they don’t know that is what you are doing. They just THINK you are being kind enough to HELP THEM get into the property by saving them from having to come up with an extra $2k or whatever it costs you to replace the carpet! 
BTW, never think about a question being a dumb question to ask. The ONLY dumb question is the one you never ask!!!
Re: This Ain’t Vegas Baby! - Posted by Tony-VA
Posted by Tony-VA on July 06, 2002 at 17:06:47:
As for advertising…YES! Do them all. Stack them in piles if you want to at the house, post them anywhere you can, run an ad, post Bandit signs. From the sounds of this deal, you need to get out from under those payments immediately!
Don’t just make a half harted effort at marketing. Blitz it with what you can afford and get creative for what you cannot.
As for bandit signs, go directly to www.banditsigns.com
Best Wishes,
Tony-VA