It sounds like you got a good deal. You have analyzed the numbers conservatively, and the deal is good, now pull the trigger. Drive over today, do what the previous post said about all cash today, if the guy doesn’t budge, then think about it for a few secounds, look at the ceiling a few times, and sign the contract for that amount. If it makes you 66% yield with good number crunching, then CLOSE IT!
We look forward to hearing how you made out. Chris
I have a home i am looking at right now. By my best figuring, if i buy at the price he is at right now ($2500) and make some repairs($1000) I could get about a 60% yeild give or take. But I think after paying another months lot rent the seller may go lower on his price, therefore increasing my yeild.
I dont know what to do. I could have a nice yeild. But am scared at that price it will sell in the next month. It is a 1976 14x60 in pretty solid shape. In a VERY nice park with cheap lot rent. I am going to go look at it tommarow for the second time. (he started at $3500) He did not sound like he was going to budge below $2500. Should i just offer him a little less, take my 60% yeilding deal and move on? How often do people sell these in situations like this?? The sellers have ads in the “Free Ad” paper and a sign in the window. Thank you for your help! John
Go back to talk with him again, and as your starting to walk out with your hand already on the doorknob and the door partially open go ahead and pop the question. That being if you paid cash today whats his lowest price. If you already know you’r going to pay the 2500 then why not try one last time for some concession. If you only get enough to pay your gas over there then you’r that much ahead of the game…
Posted by Gregory (VA) on September 14, 2004 at 08:11:12:
If you feel your numbers are 99% accurate, and you feel comfortable with “only” a 60% yield, then go for it.
What was it that Lonnie said in DOW, wasn’t it “Pigs get fed, Hogs get slaughtered”?
I think I’m a little bit of a Hog right now. Since I don’t know what to expect (first deal), I’d prefer missing a few marginal (at least to me) deals then get stuck with more than I bargained for. I want to give myself every chance to make my first deal a smashing success.
Posted by John M. on September 13, 2004 at 18:10:57:
I say strike now. You don’t want to beat him up too bad, or possibly lose to someone else. Sounds like he’s about as low as he’ll go, and 60% sounds “good enough.”
Posted by Gregory (VA) on September 14, 2004 at 14:24:38:
My “only” 60% yield comment was meant to be taken a bit tongue in cheek. Where else can you get a 60% yeild? If you feel comfortable with your numbers, then be a pig (not a hog) and go for it
Posted by Tony-VA/NC on September 14, 2004 at 08:38:59:
Gregory,
It is wise to put the odds in your favor. But it can also become a bad habit to wait for the home run deal. Many are getting where they want to go with a combination of base hits, doubles, triples and home run deals.
If you follow Lonnie’s book closely, you will have a lot of room for error. The first deal need not be a home run. Get on base here. You will learn more from the first deal than you will most any other deal.
In most cases, the first deal may not be a smashing success but it is profitable. But that deal begets other deals that are smashing successes.
I am not trying to imply that you should jump on the first deal you see but I am saying that it is more important to get a decent first deal than it is to sit on the side lines waiting for the slow pitch down the middle.
Posted by Gregory (VA) on September 14, 2004 at 12:14:53:
Thanks for the good advice Tony. I am trying to walk that line right now. I know that sometimes waiting for that “perfect” deal can just be an excuse to procrastinate.
I can’t wait to do my first deal, but I don’t want to be a motivated buyer. If I have to miss a few deals to learn what a good deal is, then that is part of the price of learning. On the same hand, I am scared to death of buying. I guess it is hard to leave our comfort zone, and I am going screaming and kicking, lol.
I’m not necessarily waiting for a home run deal either. I just want to be able to buy low enough so I can rehab if needed, and sell for about twice what I have into it. I.e. have $4k into the deal and sell for around $8k. That’s my goal at least, especially since lot rent around here is so expensive ($350+/mo), I don’t want to get in a deal where I have $6k into it and can only sell for $7-8k. An extra month or two of holding costs can turn a thin deal into an Alligator awfully quick, I’d imagine.
I’m sure I’ll learn a lot from my first deal when it eventually happens. I reckon that as I do more deals I’ll know my market better. I’ll be in a better position to know what a good deal is, and be able to take some thinner deals along with the better deals.
