You Win Some..You Lose Some (long) - Posted by Gerald-DC

import · February 18, 2002, 1:04pm

Posted by Gerald-DC on February 20, 2002 at 13:46:55:

My sources tell me that the 3rd investor is l/o the prop for 175, does not intend to do any repairs other than replace the dishwasher and wants 10% (negotiable) and is telling folks that the ave house in the area is selling for 175K.

The reality is that the house is worth in its current condition about 145-150 and while a few houses have sold in the 170’s in that area, they have been seriously renovated.

I don’t know if you saw the house, but it needs a minimum of 8-10K in work. The roof is leaking, there are electrical problems and it needs paint, carpet and kit and bath upgrades.

My point, there is no way that the house will appraise for 175K so it is unlikely that the t/b will ever purchase the house anytime w/n the next two or three years. So the 5K promise is really illusionary.

On the brighter side, I’ve learn several important lessons here that should help me nail down my next sub2 transaction.

In fact, going to see a Seller tonight about a 3/1.5 in PG county tonight. Wish me luck.

import · February 18, 2002, 1:04pm

You Win Some…You Lose Some (long) - Posted by Gerald-DC

Posted by Gerald-DC on February 18, 2002 at 14:04:00:

and then sometimes it rains.

First off, I am not some sage real estate guru, but I am out there working hard in real estate. Just wanted to share some recent experiences.

In January, I had almost written off two deals, because the sellers were dragging their feet and just would not pull the trigger to do the deals. One deal was for a sub2 and the other was an estate sale that is perfect for a rehab. (Passed Steve Cook’s formula with flying colors). I had sent the rehab seller a contract via express mail and had left the paperwork for the sub2 sellers to review.

In early Feb. the Sub2 people finally called and said they were ready to sign the papers. The rehab seller (who lived out of state) called with some lame excuse and said he still needed to review the contract.

At this point I am thinking that the sub2 deal is looking good b/c the sellers had the paperwork to review for almost two weeks and they called me saying that they were ready to do it. I am thinking that my rehab seller is out shopping my contract and is not going to follow through. I mean we had agreed on the terms and I sent him a return express mail envelope three weeks earlier.

So what happened? The sub2 couple had me meet them at their house at 8:00 pm on a Saturday. I called a notary to meet us there ($85.00) and expected to be in and out in an hour or so. Imagine my surprise when the couple started asking me the same questions that they asked me when I first met with them and questions every aspect of the various sub2 documents as I presented them for signature.

Rather than go into a lenghty narration, let’s just say that the papers were not signed and that another investor was called and is now advertising the property as a lease option. Talk about a kick in the gonads.

The rehab seller called me out of the blue to say that he was in town and ready to sign the contract. Sure enough, when I met him at the property,he had the contract in hand that his attorney had reviewed.

This rehab should net at least 25k on the very conservative side and may net as high as 45K.

What I learned from all of this is to not give up on sellers, stay in touch with them on a weekly basis while they are deciding. Also, when dealing with a divorcing couple, try to speak to both people seperately to make sure there is a meeting of the mind.

Also, don’t count your chickens until they hatch. I just knew that the sub2 deal was a done deal. It never dawned on me that the sellers would not review the paperwork that they had for two weeks (they admitted without apology that they had not touched the paper work)and then call me to say that they were ready to sign and then go into an insane game of 100 questions and demanding to have their lawyer review them and then call another investor and sign up with him.

On the other hand, I had mentally written off the rehab seller b/c he had stopped returning my calls and made lame excuses when I did reach him.

As a side note, I was having lunch with a brand new newbie when the sub2 seller called to tell me they sign with another investor, I was a little miffed.

Minutes later, a seller of a property who I have sent several letters to called me to say that they will allow me so see the property and make them an offer. This pumped me up b/c this property is a big house in a hot area and it is not on the market. If a deal is made, there is a nice spread involved.

Well, best regards and happy investing to all.

import · February 18, 2002, 3:35pm

Re: You Win Some… - Posted by Brent_IL

Posted by Brent_IL on February 18, 2002 at 16:35:34:

Gerald,

I have difficulty remembering where I have read things. One that I have remembered for twenty years is a sales book, long out-of-print, called, ?7 Seconds to Success in Selling? by Willie Gayle. In the book, he describes what he calls a prospect?s ?two minutes of insanity.? He said the buyer has already decided to buy, but his or her fear of being taken by a slick salesman, and the emotional let-down of buyer?s remorse that commenced when the decision to buy was made, makes the buyer an emotional wreck. He will panic and act irrationally by shouting, acting rude, or asking nonsense questions. His advice was to wait them out and then continue as if nothing had happened.

I started using this in my own presentations, and found that my closing percentage jumped significantly. Prior to reading the book, I would take it personally and tell them to call me if they changed their mind, and then I would leave.

Your post just triggered this thought.

import · February 19, 2002, 8:31am

Re: You Win Some… - Posted by Kristine-CA

Posted by Kristine-CA on February 19, 2002 at 09:31:21:

Brent: I am seeing that seven seconds of insanity on the selling end too. The minute the seller figures out that someone else may make money with their property they get all defensive and weird. I’ve waited it out, but sometimes it takes more than minutes–more like weeks.

But I am noticing that when I write again or call like nothing happened and make yet another cash offer and tell them I will bring the money and the deed to sign (and the notary) to their location, they are in a different space about it all.

Very, very interested point about dealing with people’s emotions around buying and selling. Thanks for sharing the source. Sincerely, Kristine

import · February 18, 2002, 5:41pm

Re: You Win Some… - Posted by Gerald-DC

Posted by Gerald-DC on February 18, 2002 at 18:41:54:

Brent,

Thanks for the “two minute of insanity” info. In my case it was 2.5 hours of insanity. In restropect, if I could have been more patient, I probally would have gotten the deal. But after going around in circles with them for over two hours, I just got frustrated and left.

Now here is the funny part, they had already moved out of the house by 2/2/02 and I had agreed to make the March payment so I figured that I had some leverage and that they would be begging me to sign the papers. WRONG, they called another investor, told him about my deal and the other investor simply told them he would give them 5K when he SOLD the property.

Even though I think the seller outsmarted themselves b/c it will be years IF they ever see one dime of the 5K, I think I may make a similiar offer next time I get stuck in negoiations on sub2 deal.

import · February 19, 2002, 9:58am

Re: You Win Some… - Posted by ToddB (Va)

Posted by ToddB (Va) on February 19, 2002 at 10:58:38:

This deal sounds real familiar. Maybe we were involved in the same deal. I had a house in Cheverly, Maryland where I offered 3k to the seller when I sold, the first investor offered nothing ,and a third investor offered 5k. I would have beaten the third offer, but it was too late, cause Elvis had left the building.

Todd B (Va)

import · February 18, 2002, 7:54pm

Re: You Win Some… - Posted by Redline

Posted by Redline on February 18, 2002 at 20:54:38:

Hey, a maybe $5k is still better than no $5k.

RL

import · February 20, 2002, 10:46am

Re: You Win Some… - Posted by Gerald-DC

Posted by Gerald-DC on February 20, 2002 at 11:46:50:

Did you have the pleasure of meeting Elvis and his “lovely and pleasant” wife Nashema?

import · February 20, 2002, 11:28am

Re: You Win Some… - Posted by Todd B (Va)

Posted by Todd B (Va) on February 20, 2002 at 12:28:13:

no, I didn’t get to meet her. I was so looking forward to getting to know her real well in a 2 or 3 hour closing.

Todd B (Va)