Why don't people want to make money?

Question

Closed on a fourplex a couple of weeks ago, started making calls to set up landscaping and snow removal. Called 6 different companies who's trucks I see all over town with regularity. Only two of the six called me back: one said they would get right back to me, but never did. The other got back to me, but didn't give me what I had asked for. I had to chase them both to finally get one to actually do what I wanted.

Started making calls to set up trash and recycling service: same exact thing. Then, when the company I chased down to do the job finally dropped totes off, they didn't drop the recycling bins. Had to call a hundred times to follow up and get that done.

Called an insurance broker looking for an excess liability policy - never got any response.

Shopping for my next small multi: find a Triplex I'm interested in, have my agent talk to seller's agent. Nothing. Follow up with my agent, she follows up with him. "I'll get back to you about setting up a showing." Two days go by - nothing. She calls him again. "It's a real hassle to set up showings with all the tenants, you know." We set up showings for a Friday - call to confirm the day before (because we knew it would happen) and he canceled. Then let the listing expire (yes, I'm on it. Already talking to the seller off market.)

And on and on it goes. I'm sure folks who have been doing it longer than me have endless lists of this happening - but what's up with this? Don't people want to make money?

Chris Mason · Answer

For the various minor service providers, yes what you describe is a not infrequent lament of REI and property managers.

For the triplex that you couldn't get a showing on, just tie it up in contract and do all that stuff during your inspection contingency period. Once it's tied up, sellers have an amazing ability to suddenly make all the things happen to close it ASAP. The approach you are taking is an owner occupied SFR approach, not necessarily a serious REI MFR approach if it's a modestly warm market. In any modestly warm market, you TIE IT UP IN CONTRACT FIRST AND ASAP so it's yours if you decide you want it, and then do all the little things (like actually look inside the units) later. Invoke your inspection contingency and back out if you decide you don't want it.

Jason V. · Answer

Good points, thanks Chris Mason! I'll definitely be taking this approach in the future.

Wes Brand · Answer

Chris Mason Hah! Sellers disclosures. As if those exist in Rochester NY.

Jason is actually in a good spot there, since 1/ virtually no deals in NY go down without an attorney approval contingency (usually 2ish days), 2/ sellers disclosures are basically unheard of.

Not sure if the scattershot 'make a bunch of offers' approach is right for Rochester. I know there are a few agents that work with investors active in that area on the forums here, so they might be able to advise you on that...

Jason V. · Answer

Chris Mason That's definitely a good way to motivate a seller/seller's agent - is that a generally accepted practice? I'm just not sure how well that would go down around here. I'm in a fairly rural area, and there isn't much in the way of investors operating out here, so I really don't want to get myself a bad reputation. Then again, the seller's agent is a real piece of work, so I wouldn't be particularly bothered if I ticked him off.

I'm more than willing to give it a shot - it's just that 90% of properties I look at aren't even worth making an offer on anyway (at least, not anywhere near the list price.) If the situation warrants it, I'll definitely give this a try. Thanks man!

Chris Mason · Answer

I can't really speak to what's accepted in your area.

Out here, many sellers prefer not to show the inside of the units, or will sometimes drag their feet about doing so (gotta find a time when ALL the tenants, and you the buyer, are free, bla bla bla), until it's in contract or something else more 'serious about buying this place' than just looking at a preapproval letter and proof of funds.

If it's MFR and tenant occupied, those tenants generally don't want dozens of looky loos stamping their feet through the unit, and if the landlord ends up keeping the place instead of selling he doesn't want to deal with pissed off tenants.

It really depends on the seller and listing agent. I've seen sellers/LAs respond to a written offer with offers to show it, for example, which is fine too because it gets your foot in the door. When you lead with the written offer after running numbers on the seller's claimed NOI etc, it can have a way of setting you apart from potential time wasters, people engaging in fantasy about being a RE tycoon, and looky loos.

And if it turns out the seller mis-represented the numbers that you based your offer to purchase on, or left important things like a crumbling foundation off of seller disclosures, that you discover during the inspection period, those are all valid good faith causes for renegotiation. If the seller was 100% honest about everything, however, be prepared to stick to your offer price.

Logan Hicks · Answer

I own my own landscaping company, and will tell you first hand, most of my "competition" is one to five man shops who arent licensed, arent insured, and have no actual license to do business in any state.

We operate with a 24x7 call center, as well as offer full service commercial and residential landscaping.

We offer free estimates, discounts for bulk work (based by number of sites), and even offer financing options for large projects.

We are fully licensed, and carry a 2M insurance policy.

Feel free to message me if you are interested.

Why don't people want to make money?

Why don't people want to make money?

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