So, I put up about 40-50 bandit signs out during the weekends and take them down Monday morning. I did this for about a month.
I know I've been a member for a while now but I finally made the decision to stop contemplating to evaluate to consider to decide and conjure and..whatever.
SHOOT FIRE AIM READY!!!
I got about 8 calls from this. The first call was from a local real estate investor looking to buy the houses I'm looking to wholesale. GREAT! I didn't know this at the time but we had met before at the local monthly real estate meetups. He is the host. A couple other phone calls were unmotivated, a few were over indebted and referred to a Short Sale Realtor. One week, a guy calls on a weekday from the ONE SINGLE SIGN I left up by accident.
After talking with him over the phone I found out that his wife passed away and it was their dream to fix the place up but now he just wants to be done with the home and move out of state by the 5th of next month. The details are a blur but I could tell he was motivated so I decided to meet with him to look at the home.
I was really nervous because this was my FIRST EVER appointment. I had my lowest of the low comparible sales, two copies of a purchase contract, note pad, and my highest price jotted down on my folder so I knew my highest price.
The home owner had a crew working on the house. The carpets were ripped up, the kitchen cabinets were taken off, junk laying everywhere in the backyard. It's quite the story this guy had about the home and the plans he had for it. They had done A LOT of renovation. They added a new deck, they replaced all the electrical with a new panel (his wife was an electrician), they added a bath downstairs...The list goes on and on...And they had ZERO permits. I was a bit concerned.
Homes in that area were selling for around $100+ with comps in similar condition at $42,000. I had two similar to that price ready to show him.
So, after looking through the house and finishing up, I estimated the repairs at $14,000. Tax assessment is $81,000. I asked what he was looking to get for the property and he said $55,000, $50,000 if I do the carpeting.
I said that for me to come in and finish all the repairs, I mean, that's a lot of work, is $50,000 the best you can do?He paused, thought about it, and said that he guessed he could do..$45,000. I said well, for what needs to be done, I mean, it makes me nervous, just on this street there's 5 houses for sale. That one on the corner has been listed since 2007 for $70,000! I mean, bear in mind, my offer is going to be your net number. You wont have to deal with closing costs, Realtor fees, concessions, having people trample through the house. We can close and we can close quick. I need to be at $30,500...I raised my eyebrows, kind of sad actually, I felt bad...I shut up. I didn't say another word...He broke eye contact, shuffled his feet, nodded his head, and said "well, let's meet in the middle, you're at 30, im at 45..$37,000."
"Honestly, Mr. Seller, that makes me uncomfortable. I'd be willing to go up a few thousand. I could work with $34,000."
I had factored in $7,500 for an assignment fee. It just went to $9,000 at my estimated sell price of the taxed value.
It was raining out and we were outside under the small, painted copper awning for the front door. I was so excited I pulled out the purchase contract to start filling in information and got it wet.
We signed two copies of the contract, I put the home on a lock box, I immediately opened up escrow and told them to start a title search.
I marketed the property for $42,700.
My buyers list was pretty small. The first guy I called was the guy that called off my bandit signs. He met with me the next day. Told me he JUST SOLD A HOUSE 3 HOUSES OVER. Lol. Yup. Sure enough, I only saw 4 for sale signs up.
He pointed out things that I didn't notice in my repairs. The stairs had to be brought up to code ($2,500), the attic needed insulation ($1,000), on and on... He told me the repairs were going to be over $30,000!
But here's the kicker. The house is in the tax records as a 1 bedroom 1 bath 820 livable sq. ft.
The basement has 2 bonus rooms that can potentially be converted to bedrooms if you add egress windows.
So there was tons of potential. Much more than the $81,000 tax assessed value I had run my comps on. The house he sold right nearby sold for $150,000.
After exhausting my buyers list, running an ad through postlets for a few days (I must be impatient). I take the listing down and decide to partner with him. He does an email blast of THIS:
to his buyers and several people want to see the home ASAP.
I meet with them there, one investor says he'll take it. The other says he will pay $2,000 more. I decided NOT to accept any higher bids. I could tell this first guy that's gung hoe about the deal is a serious buyer. He told me he wouldn't have come if he knew there would be a bidding war. I ask him do the assignment for an additional $300 to make it an even $43,000. I pulled out a contract right there and he wrote a non-refundable earnest money deposit for $2,000 with us standing on the sidewalk.
BOOM BABY! My partner and I meetup afterwards to decompress and talk about the Escrow process. He asked how I negotiated.
"You're like a negotiating ninja." he says.
"Haha, I listen to a lot of podcasts. I think I'm starting to talk like him."..
"Would you feel comfortable getting on stage at the next Real Estate Meeting?"
I did that about a week ago. I'm now seeing about 3 different YELLOW WE BUY HOUSES SIGNS, lol.
Funny thing? I get home that day, open my mail box to find my W-2. $9,400 from Lowe's.
One lonely bandit sign in the middle of a work week was left out and this guy calls from it. The one single cash buyer that calls from my bandit sign is the one that helps me the most out of everyone. My FIRST motivated seller, My FIRST appointment and my first OFFER! and I get an assignment fee that nearly matches the equivalent of what I made working part time all year at Lowes.
Hah. Wow... This is awesome.
I made the mistake of not listening to my partner and offering the property for much more. I made the assumption that a postlets listing that is blasted out to zillow, redfin, etc. would remain forever in the listing history. I had already listed it at 42,700 and didn't want it to be marketed at a higher price when investors went to look at it.
Though I did do this also for the seller because he wanted to leave on a particular day coming soon and I was able to make that possible. Knowing what I know now it really didn't matter much because we could have fedExed everything.
The $300 that was negotiated for a higher price I wanted to go towards the seller for hotel costs because he was staying there during construction.
We'll each be earning $4,350 - some escrow fees. I also learned that title companies here charge a higher rate for transactions that are not facilitated by a realtor. I now have a realtor in place that will be involved simply to offset the premium escrow fees.
"A man who has never lost himself in a cause bigger than himself has missed one of life's mountaintop experiences." Richard Nixon