I’m sure it was nothing personal. I took it as a good joke on me.
I have this bad habit of trying to understand things and figure them out.
I figure he had us associated in his mind because of past debates. Since he likes you and doesn’t like me, your name popped into his mind when he set down his message. That’s the only way I can see your name getting dragged into this.
I still think it’s funny, and an interesting example of human psychology.
Posted by Kahtleen Cory on April 13, 2002 at 19:55:06:
There is an elderly investor in our town who has several properties for sale. He advertises each of them all the time and no one buys them. He is not a rich man and I know this situation is difficult for him.
His problem is: 1. He is asking more than market value (market here is very slow) , 2. He advertises that shaky credit is ok, low or no downpayment needed, etc., but then just sends everyone to the bank. No one is biting and I don’t blame them. There are comparable properties selling for less on every street.
I would like to make an offer on all of the houses together, thinking that maybe the big combined monthly payment amount may inspire him to accept, even if he doesn’t get all cash. Otherwise these homes are just sitting vacant taking tax money from this gentleman.
Has anyone ever done a package deal? Are there advantages or disadvantages to buying in this manner?
This is not as much of a package deal question as it is getting to know this elderly gentleman and find out where he’s coming from. And you aren’t going to know where he’s coming from until you build up enough trust to where he will open up. I’ve dealt with alot of elderly folks through the years and it takes time to build this trust. Once you have it the deal will fall into place. This may take a couple of months , it may take a couple of years, but once his trust is won you will find yourself buying all his houses with next to nothing down and at good prices.
Your downpayment will not be cash to him. Your downpayment will be the trust that you have built with him.
Posted by Dave Mckee on April 14, 2002 at 11:31:16:
Kathleen,
I suspect that people who do this are looking for someone to talk to. I have known people who do the same thing with antiques and clasic cars. They are often lonely, have limited social outlets and have found that they can attract a stream of people who will be nice to them because of what they seem to have for sale. But they realy don’t want to sell, they want friends. If you see that going on, become a friend, but don’t spend a lot of energy trying to structure a deal with them. Keep looking…elsewhere!
I’m working on the same situation. I’ve offered to do one house at a time at wholesale, where he holds a note for 7 monthes while I fix up the property and sell it (he wants 5,000 down - which I get from a private investor). If I can’t sell within 5 monthes, I can do a 6 month seasoned cashout refi, pay him off in 7 and rent out the properties. - Just make sure the numbers work! You’re here to make money, not get stuck with a bunch of non-performing rentals. Be upfront and tell him that you’re an investor and need to make enough money to cover your risk. I had to show him my figures and promise to give him and his wife a night out on the town if I make more than I planned!
Are you sure this situation is difficult for him? I have run into this before where the person was old and alone, and did this kind of thing for company.
Posted by Kathleen Cory on April 13, 2002 at 22:00:47:
It is hard to know where he is coming from. It very well could be what you say.
From the local grapevine…He was pretty successful in his youth. I think it may be just a security issue with him. If he gets rid of all he’s worked for, what’s left?
But, I would dearly love to purchase those houses. I have enough resourses that I could give him a combined downpayment that would equal buying just one of them outright. If he agrees, there definitely has to be some "coming down in the price "work.
Do you have any advice for structuring something like this? I believe he has twelve SFH. Maybe he could just sell me “some” of them
That way, he could keep the others for his future security or to keep people coming and answering his ads if he is lonely. Whatever the situation is, I want to handle it with care. BUT I DO WANT THOSE HOUSES!
A woman aged 80+ advertised a 12-flat for sale for nearly a decade. It took me six months before I realized what was going on. I negotiated on-and-off for seven years before I drifted away. After listening to her life’s history many times over, I knew the property as well as she did, but it was all for naught.
Why those particular houses? From a business standpoint it makes no sense. You say there are plenty of other houses just as good for less money. Why not buy them?
If it’s personal and you want them because you want them regardless of cost then go ahead and give him whatever he wants and hang the expense.
Is there something about those houses that drives people nuts?
Maybe if you get to know him and find out what he really wants you can get a deal.
I know what you are saying but his standards may not be yours. Chances are he has all the money he wants, and if he had twice as much he would still be driving an old car and wearing old clothes.
Real estate is so flexible. In the end we can all get what we want. It doesn’t always happen the way we anticipated.
If you discover that he just wants someone to talk to, try this offer. Tell him you’ll L/O all of his properties if he gives you full credit for the lease payments, but you will need the benefit of his long experience.
You offer the seller a six month property management contract if you purchase the houses. The fee is $X,XXX in cash. You would reduce his down payment requirement by the same amount in your offer. Keep it around 5% of the total purchase price. The seller agrees to be available for three hours a week for 48 weeks on an as-needed basis. You?ll call him when you have questions or need advice. The services he will provide are spelled out in a contract separate from the purchase contract.
You earn your discount by spending a couple of hours listening to war-stories. Who knows, you may pick up some RE tips.
The short term on the management contract means it can be written off in the first year as an expense. An added bonus.
There is another angle on this. If you see him in his old clothes and old car it is natural to assume he is broke. Yet you know he owns a lot of valuable real estate which he bought years ago. So how could he be broke? Chances are he has a lot more money in the bank than it appears. It is not unusual for people with plenty of money not to show it.
On the other hand we have all seen the guy (or gal) with the $800 suit and the $5000 watch, behind the wheel of their Land Rover or BMW, talking away on a cell phone the size of a match box. They must be rich. Then next year we hear they went bankrupt. How could that be? Well the clothes and watch were bought on credit cards, the car was a lease, they lived right up to the limit of their income and credit all the time and in reality they didn’t have a single dollar behind them.
Read The Millionaire Next Door to find out who really has the dough and who doesn’t. YOu might be surprised to find there are millionaires all over the US who make their money in boring humdrum businesses, who never paid more than $200 for a suit or $100 for a watch, who drive older model American sedans.
The ones who put up the big front usually have little or nothing behind it.
Posted by HouseRookie on April 14, 2002 at 12:28:40:
I notice the exact same thing a few days ago while visiting a friend in one of the wealhiest area of Minneapolis/St. Paul. It was a beautiful day so all the garage doors were open. Interestingly, most had used vehicles, even cars from the 80s and 90s.
On the other hand, I almost always see NEW and expensive vehicles in the poorest areas.
When I see people with new expensive cars I see accumulation of liabilities…as Robert Kiyosaki would say.
I call it spending money you don’t have on things you don’t want to impress people you don’t like. LOL
I also notice a new phenomenon. When I say something they like, they attribute it to Johnboy. When I say something they don’t like they still slam me.LOL.
Is this the cause of my unpopularity or the effect?
I guess it’s more important to be popular than to tell the truth. Is that what they call marketing?
I still can’t figure out how my name even came up in this.
But as far as your last comment about more important to be popular than to tell the truth, are you referring that statement about me??? If you are then please tell me what I said about something that wasn’t the truth that I lied about! As far as marketing, marketing what??? I have no courses to sell. I don’t offer any mentoring or anything. So I have nothing to market. So what would I possibly have to be marketing??? Do you care to clear this up as to what you were referring to with your last comments on this?