Pop Goes The Plan

[Randy E.]

For much of this year, I've had my eye on picking up a property or two from an elderly woman who has several properties that have sat vacant for years.  I hadn't talked to her about it yet, because I didn't have my financing in place and I didn't want to talk deal until I was ready to close the deal.

A couple of months ago, I noticed a dilapidated house with a knocked-over FSBO sign lying in the grass. When I got home, I checked the tax records and discovered this one was also owned by the same woman. Discovering she had one of her properties on the market made me more excited that she was ready to empty her portfolio and that the others would also be available.

For the past two months, I've dreamed of buying two or three of her properties, rehabbing them, and doing quite well with them.  I had trouble deciding whether I wanted properties A+B, or B+C, or A+C, or C+D, or C+D+A, or, or, or ...  I was giddy with the possibilities.  So much so, I kept telling myself I had no idea if she wanted to sell the other properties, much less the price of them.

Now, as my financing is wrapping up, I decided it was time to give the woman a call.  So I dialed up a few minutes ago.  

Not only did she come in above the price I was considering, she came in above what the market rate would be for the house in its current condition.  Not just that, she came in practically at the price it should be if it was in very good condition and being sold to owner occupants. 

POP!  My balloon just popped.

I thanked her for her time and hung up.  She knows how to get in touch with me if she changes her mind but I don't see that happening.  She's a lifetime property manager and a tough old cookie, and she doesn't need to sell for financial reasons.  If that's the price she wants for that house, I don't think she's going to come down anywhere close to what I'd pay.  And if that's the price she wants for that house, the other properties, if she ever decided to sell them, would be even more.

POP!  POP!  POP!

The bright side is now I can focus on real options and not dreams.  Not that I haven't been keeping up on other options, but I was spending too much of my downtime thinking about those properties.  I just find it crazy that I get myself all excited about dream deals that don't even exist yet and thought I'd put it out there.  I needed to publicly humiliate myself so I don't get carried away again.  ;-)

Carry on,

Randy

[Abel Curiel]

Good Morning Randy,
Dont be so hard on yourself. Might seem humiliating to you but it's pretty brave to share what we perceive to be embarrassing info.
As far as the deal that never was, I wouldn't give up just yet. It sounds like you have a grasp on what property is worth in the area and if she is indeed that far off with her demands, the property wont sell. Even if they do sell at those asking prices, BE GLAD IT WASN'T YOU! Better to pass on something than to commit to a deal that doesn't work financially. I would give her a call or drop by every now and again. Establish a rapport and see where it goes. You never know!

Good luck!

-Abel