STONEWALLED!

[Robert Lorenz]

So an engineer at work mentioned his renter neighbors had moved out this weekend and he thought the house was a bit of an eyesore.  I got the address and checked the comps (4934 E Mitchell, 85018 if you're interested).

Nice neighborhood, nice house.  I walked the outside of the outdated property and snapped some pics, rolled some numbers in my head around:

Mid-range ARV around 400k

new doors and windows throughout, 15k including entries for good stuff (I know that's high, better to err on the side of caution)

fresh paint in/out at $5 per sf for good stuff, call it 9k

flooring throughout, 6.2k at $3.50 a sf

2 bathrooms, 15k 

kitchen 20k including appliances

so about 55-60, plus some extra for unforseen and pool, so 65-70k, leaving me an offer of 200-230ish

I'm sitting in this driveway for a solid 45 minutes taking notes, running numbers, pulling title info & last sale price/date (Chicago Title mobile app), etc.  Finally found the owners phone numbers (on Google ;) and called.  Nice lady, 70 years old.  I ran my speel:

"Hi, I'm a colleague of a neighbor of a home in your name here in Phoenix, and he mentioned today at work that your renters moved out and the home needed some updating.   I see you live in Florida, are you retired?"

She entertained this for a couple of minutes, until I asked if I could make a cash offer on the house....

"I don't know, talk to my husband"

He got on, was immediately aggressive and said "No way I'm selling out to another investor, I'm an investor myself. If you want the house you can buy it when it gets listed on MLS!"

End of my very first cold call.  I had to drive 45 minutes home with my now-cranky 2 year old, missed my Crossfit class AND dinner.

I feel I am blessed that I am able to laugh it off, this is clearly not for everyone.  I can certainly see why about 98% of "wholesalers" never actually make a deal.  On the bright side, I passed a neighborhood on the way there that looked promising, and sure enough when I pulled in on my way home, I grabbed about 15 addresses of home with deferred maintenance sitting in a neighborhood with a 150k+ recent median sales price.  On just 3 blocks :)  

when life gives you lemons, right?

[Jake Thomas]

This will happen often so don't let it discourage you. Typically I try to reach out to them before I spend even a minute analyzing the property. The first step is find the motivated seller. I rarely get to price on a house on the first conversation its more about if they want to sell in general. If they don't want to sell (for whatever reason) I don't spend anymore time on it and move on. If they do I try to setup a time to see the house and then move forward from there. Take it as a learning lesson and keep trying. This isn't a business for the timid.