Approaching off-list property owners

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Hello all! I'm new to this game, and trying to find my first deal. I live about an hour and half away from Spokane Washington, the most ideal place in my area to flip. My plan is to buy a rundown home off-list via direct mail and driving for dollars. I went last weekend knocking on doors of less than desirable properties in Spokane. I was able to find a house that is very ideal in my opinion. It is in one of the best neighborhoods in Spokane, and it looks like it has been vacant for years, the siding is falling off, overgrown, etc,. Not only this, but the owners have missed property tax for the past three years. They own it fully, and bought it years ago for less than half of its current assessed value. The home the owners currently reside at had half of property tax unpaid this last year as well.

So my question for you, the bigger pockets community, is how do I approach the owners? I am 18, inexperienced, and generally have no real credibility to offer compared to competition. I don't want to offend them by shoving the property tax issue in their face or criticize their house too heavily, however, to bring them to terms of their need, I feel like I need to bring it up in a non-threatening way?

My plan is to send a personally written letter to their primary address, and dig up their home phone via yellow-pages after the letter is delivered. (they are retirement age, so a landline should work well) My approach in both the letter, and during the phone call are critical. Does anyone have advice on the correct things to say and write given the situation of both the owner and myself?

[Jacob Evans]

Hey Hayden,

I've been investing in Spokane since 07' and have purchased quite a few tax foreclosure properties. I commend you for your ambitious and tenacity because door knocking is something 99.9% of the population would never even have the guts to do, let alone, execute on. 

My suggestion would be to just portray yourself as a friendly neighborhood chap who's looking to purchase a property in their area. That simple. 

When I'm door knocking I generally don't bring up the tax issues because I find that it can tend to put the seller on the defensive and degrade the conversation and trust with them. 

The ideal frame of interaction is just a simple transaction between a buyer and a seller. If you, as the buyer, can help them by closing quickly and buying in as-is condition, well then, all the better for them and you're more likely to close the deal. 

If you put yourself in their position then you can imagine that they're hopeful that, regardless of their current circumstances, they'll be able to sell for top dollar. So the ideal buyer in their mind and the person they're looking to talk with about selling is someone willing to pay top dollar for their home. Now, the person who's willing to pay top dollar isn't the sharky investor who's talking to them because he knows they're in a tough financial spot, but is the buyer who loves THIS particular house, sees its potential and will be a live-in occupant or contractor looking for a bit of a project to earn sweat equity on. If you play that "part", you'll get the deal. 

Their situation only gives you a higher chance of buying the house and scoring a deal during negotiations around price, but it isn't something that guarantees a deal and it isn't something to focus the conversation with the seller around. It can however, be used to inspire urgency and illicit emotional motivation, which you can subtly use in your favor during the negotiations process. 

"Hey my name's Hayden, I know this is kinda random, but I saw your place over there on __ St and I was wondering if you might entertain an offer on it?" I just got some new funding put together, don't really like paying realtor fees and I'm looking to buy a house like that one, in that area..."

Your letter should state something similar, but a phone call is always more effective.  

Best of luck! 

If you'd like help structuring this deal, or buying one of our wholesale fixers, we've been wholesaling in town since I began and I love talking shop with anyone who'll listen ;-P

Later!