Talking with sellers

[Dave Defourneaux]

Hello Everyone!

I have some questions about talking with potential sellers. I will preface this by saying that I am a complete newbie, and have yet to do my first deal. I have been in the education phase of this for about six months now and feel I am close to getting something going. I tend to have a perpetual case of "getting-ready-to-get-ready", but it occurred to me the other day that I might just have a great opportunity right under my nose.

I currently rent a room in a house that i live in part-time. Long story, but basically I commute between two cities for work, so this is my home-away-from-home so to speak, and the house is currently FSBO. It is a good property in a good neighborhood and would be perfect for a cosmetic rehab and flip, or to continue as a rental (with me on the other side of the table). I have done some rudimentary valuation by way of Zillow (I realize it isn't completely accurate, but it gets me in the ballpark) and believe the owner is asking too much. He has it priced accordingly for the area, but most comps have 2 baths or at least 1.5, and this is a 3/1 house, and he feels it is "move-in ready". It is in good shape, but having lived in it myself for nearly a year I have a good idea of what it needs rehab-wise (minor cosmetic, but definitely needs a complete kitchen rehab, and could probably use at least an extra half bathroom). The owner has been showing the property, but unsuccessfully I believe.

I'd like to start an informal negotiation with him, but as this will actually be my first conversation with a potential seller while representing myself as an investor, I want to approach it correctly and professionally. We have a tenant-landlord relationship already, so we aren't strangers, but nor are we really familiar with one another. 

How do I start the conversation? What are some good ways to figure out how motivated he is to sell and what numbers he might be willing to play with? I don't have an exact value on the house myself yet (I have a ballpark figure of my offer), but I want to see where his head is at with the sale.  I believe he has full equity also and could possibly be willing to seller-finance.  How do I work this into the conversation? 

I guess if he isn't a motivated seller the point is moot, and if it doesn't work out it won't be the end of the world, but it seems like a good opportunity for me to hone some negotiating skills and at least get some practice evaluating a deal on a property that I already know fairly intimately and maybe it could actually turn into MY first deal. 

I would really appreciate any advice on how to proceed. 

Thanks for the help!