Hello DG Fam! I am working on my 1st deal and wanted to post my progress.
Over the last month I have been in communications with a couple looking to purchase a home. They where previously in a rent to own but where never able to exercise their right to purchase. Somehow the property was foreclosed on underneath them and they lost their investment.
Since then they have been very wary and unsure as to how they would be able to purchase a home. They make good money, have a solid work history, and a very low Debt-to-Income ratio, but little established credit.
I spoke with them and told them they may have more options then they know of and asked if they would be interested in working with a mortgage broker (Whom just so happens to be a very close personal friend of many years AND is an extremely motivated, hard working individual). Over the following 2 weeks they worked to qualify.
In the mean time, I began looking at properties which realistically matched their desired criteria. When during a conversation the buyer mentioned a property in which they where very interested. I obtained some basic information on the property, including the MLS#, then had my Realtor to pull comps for the property.
During this time I am working to establish a trusting relationship between myself and the buyer. I decide not to lock the property up under contract. As I am unsure if they will actually WANT the property and know that I have little personal interest in marketing the property outside of this particular buyer.
It is an absolutely beautiful property but it is not an amazing deal or anything. It is well worth the asking price and more, but I have no personal interest in the property.
As trust is built, I explain to the buyer what it is that I do. I also tell them that, even tho I would not typically arrange this, I would like them to view the property without me. Since we are on the same page, I ask that they politely ask their own questions and avoid answering too many. I know this effectively could have removed me from the entire equation, but as I said previously, I worked to establish trust.
2 days later, they view the property. I receive a phone call immediately after, on the other end is an ecstatic buyer who says they absolutely LOVE the home and want to move forward as soon as possible.
They also informed me that the homeowners have relocated to Taiwan and the property has been sitting vacant for the past 3 months. The house has been on the market for 140+ days and the last (apparent) activity was a 2 hour open house on April 19th.
I am hoping these factors will give the owner a sense of urgency. The buyer is content with the asking price, however we are worried they will not enough capital to cover closing costs at full price.
The asking price is $329,900, with comps running between $291k - $309k. However, it is a newly developed area leaving not much comparative data. Built in 2001 and sales history as follows:
Sales History Sales Price
That said, I decided to place an initial offer of $285,000.
Now as I said this is not an insane deal, the buyer however, does now have their heart set on this property. I figure if I can get the seller to:
A) accept (Great!)
B) counter and still knock some $ off of the principal, then I can easily stand to make 10-15k.
Is this INSANE? No. But, it could very well be the 1st step on my path to success (I hope this is the case!). I can absolutely use the money, but by far the biggest thing for me is EXPERIENCE.
All we need is to climb over that 1st peak, after that its all down hill!
I am now waiting (impatiently lol) for a response and/or counter offer. I will be sure to update with any progress.
Thanks and good luck all!