Where do I go from here? (Looking for a little guidance)

Question

Hello BP,

I'm at a point where I feel as if I'm hitting a wall with regard to finding a property and closing the deal. I've gone to multiple auctions (Philadelphia Sheriff's Sale), inquired of vacant/distressed properties directly with the owners, worked with random realtors after expressing interest via real estate websites (e.g. Realtor.com, etc.) and still I haven't achieved my goal of acquiring my first investment property.

The properties that I had my eyes set on at the auctions/sheriff sale have all been stayed (every time). The owners of the vacant/distressed properties seem to be okay with letting the property continue in disrepair, and/or letting the government lay a claim to it by neglecting to pay their taxes. I've received the most traction when using the random realtors that have responded to my inquiries by way of the aforementioned sites. However, each deal that I express interest in ends up falling through the cracks somehow. Either the property comes under contract or in the event of a HUD home, the property will get postponed several times before it is open to investor and then it gets pulled from the site.

When I inquired of one of the realtors that has been very responsive and accommodating re: the payment of his fees, he stated that the "seller" pays his fees. That being the case, and in the event that a HUD home/foreclosure is purchased, would the bank pay his fees? Being that the seller pays his fees (whomever that may be), would he be looking out for my best interest? Would it be in my best interest to come under contract with a realtor that I have a rapport with and gets paid by the buyer/me?

Any answers to these questions and any general advice that you have would be greatly appreciated.

Warm Regards,

Ken

Jaysen Medhurst · Answer

Hi @Kenneth C., don't get discouraged. Deals are out there. It may just be time to change tactics.

Have you tried driving for dollars and then sending personalized, hand-written letters to the owners?

What about calling for rent properties and asking if the owner is willing to consider an offer to sell?

Do you tell everyone you meet what you do?

Account Closed · Answer

@Kenneth C. stay patient, deals will come!

Julia Ann · Answer

@Paulette Midgette I have to agree with this. I know nothing about PA but I live in MA and often get driving for dollars letters even though I have no tax delinquency. They are annoying and I would never in a million years contact one of those random people even if I was interested in selling. I'm sure it's a good way to find properties since others seem to have success with it but seems odd to me.

Kenneth C. · Answer

Thanks for the response as well @Kevin Delaney

Kenneth C. · Answer

Thank you very much for the insight that you provided @Paulette Midgette! I am looking for deals in Philadelphia county.

Kevin Delaney · Answer

The bank pays the broker that they hire to sell the property.  That broker shares their commission with the broker of the realtor you hire.  Your realtor's broker then pays your realtor.  If you are contracted with a realtor, they have fiduciary obligation to look out for your best interest.

Paulette Midgette · Answer

@Kenneth C., Are you searching for your first deal in Philadelphia county or does your search also include the surrounding counties?

If you are approaching owners of tax delinquent or neglected properties in the Philly area, I would like to offer this as food for thought.  In many of the Philly neighborhoods residents are being saturated with mailing, calls, and even knocks on doors offering to 'buy your home.' I live in Philadelphia and I get them all the time.  Take it from me, it is down right annoying! Residents see these investors as not being connected to the community, not having the community wellbeing at heart.  Simply put, they don't trust you. I find that many of the referenced home are sold by absentee owners.  I believe if you can find a way to build trust with these people you will be able to get your entire leg in the door.  Consider partnering with whose knows the city, someone who the owners you are approaching can relate.

With respect to Sheriff Sales, be patient and keep at it.  You will have to work through a number of postponements but eventually all properties sell.

In PA the seller pays the realtor's commission.  In the case of HUD or a bank REO, HUD or the bank will pay the realtor's commission.  However, there are situations in which the buyer may pay all or part of the realtor's commission.  But your realtor would have to discuss this with you and it must be outlined in your listing agreement for your consent.

Don't give up, there is a lot of real estate out there.

Kenneth C. · Answer

Hi @Shawn Ackerman -  Thank you for the tips re: networking.

Does anyone have any feedback concerning my last paragraph in my initial post (pasted below)?

"When I inquired of one of the realtors that has been very responsive and accommodating re: the payment of his fees, he stated that the "seller" pays his fees. That being the case, and in the event that a HUD home/foreclosure is purchased, would the bank pay his fees? Being that the seller pays his fees (whomever that may be), would he be looking out for my best interest? Would it be in my best interest to come under contract with a realtor that I have a rapport with and gets paid by the buyer/me?"

Kenneth C. · Answer

Hi @Jaysen Medhurst - Thank you for the words of encouragement and the suggestions. I have tried driving for dollars and I have been in direct contact and indirect contact with the owners. Admittedly, I haven't been as diligent as I could with this method. I have not attempted to contact any rental property owners, but I certainly will. This tactic has been placed in my "to try" toolbox per se.

As far as telling people about what I do, I've told just a handful of people what I've endeavored to do outside of my already established career (legal/tech sector). I have asked them to keep an eye out for me concerning properties, but I haven't been very specific.

Shawn Ackerman · Answer

@Kenneth C. Find the people who are doing deals in your market and take him/her/them out for lunch.  Begin attending local REI's and or BP meet ups and start networking.  Perhaps your entry may evolve through partnership.  Seek local wholesalers who carry inventory on a regular basis.  That's how I got started in my market.  But you have the added benefit of being local to your market.  Get out there and start talking to people!!!

Where do I go from here? (Looking for a little guidance)

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