Posted by ScottE on March 31, 2000 at 08:55:43:
Tarun,
What are the ways you attract motivated sellers?
Thanks!
Scott
Motivated Seller- My definition! - Posted by SCook85
Posted by SCook85 on March 30, 2000 at 21:37:14:
It seems to be very difficult for newbies to understand what a motivated seller is. I’m not surprised because I myself looked at well over 100 properties before I came across my first motivated seller. I knew at that time that I had struck gold and have never looked for properties since.
A really good friend of mine pulled off the best sandwich lease deal that I had ever heard of. The deal was beautiful, and I feel that it is unlikely to happen for most of us.
Here are the details:
Sellers are moving from Baltimore to Philadelphia because of a job transfer. The sellers actually called on my ad but I don’t do L/O deals and it was to tight for a cash deal. My friend didn’t make much of the call and didn’t bother going out to see them. One day he was driving around and saw the street and recalled that someone had a home for sale there. He decided to go by their house.
Low and behold they were loading the moving truck, leaving that day and had not sold their home yet. He started talking to them and told them that they just owed to much on the home and shut up. The guy said to him (much to his wifes disapproval) what if I were to help out? My friend said, what did you have in mind (notice he never proposes anything himself). The guy said, I can give you some money. My friend said how much? The guy said how much do you need? My friend said how much can you give? The guy said what are you going to do with the home.
My friend told him about the lease option strategy. The guy said I’ll give you $6k to take my home. $3k now and $3k when you put someone in. My friend got all tingly inside but still did not agree. He said that the payments were still to high and he wouldn’t be able to find someone who could afford to make the payments. The seller agreed without hesitation to give him $250 per month for up to 2 years to help out. My friend said give me $3k and I’ll be back with the paperwork. He drove away with the $3k and came back to sign the deal up. The seller has done everything he agreed to. My friend got $6k from him, $2500 from his buyer and has a $250 per month cashflow.
SWEET DEAL!
The point I am trying to make about a Motivated Seller is this. Most motivated sellers are motivated for financial reasons, because they don’t have money. These peopel are so motivated that if they had money they would give it to you to take the problems away from them. Since most motivated sellers don’t have money we have to find ways to do the deals that solve the financial problems of these sellers.
The next time you are talking to someone about buying a home and you are wondering if they are motivated or not think to yourself. If this person had the money to give, would they give it to me to take their home. If your answer is “no” chances are you are wasting your time.
Happy Investing!
Steve
Motivated Seller- My Question… - Posted by Scott (AK)
Posted by Scott (AK) on March 31, 2000 at 10:42:16:
Steve,
You don’t explain in your post if the payment on that underlying loan is dependednt on the seller’s $250.
I’d be interested in knowing that.
I’d like to see how folks set things up to protect themselves.
Tarun…your deal obviously does depend on that seller paying their share. Your cashflow is only $100 and the seller has to pay $150 out of their pocket…
How have you protected yourself, and your Tenant/Buyer, in case of the sellr’s non-payment?
Thanks,
Scott
Re: Motivated Seller- My definition! - Posted by Tarun_md
Posted by Tarun_md on March 31, 2000 at 24:57:17:
Steve,
YOu are right on when it comes to defining a motivated seller. These people literally beg you to do something with their house.
I did a sandwich lease option earlier this month where my payment to the seller was 1000/month. The seller is paying the underlying mtg close to 1150/month. He just couldn’t sell the house for 7 months. I made close to 7k upfront on this deal with a 100/month cash flow.
Tarun