Don't delay. DO IT NOW.

[Frank Adams]

There are a lot of discussions about how, when and where but just as important is the willingness TO ACT. That doesn't mean to pull the trigger on a deal before you understand the downside as well as the upside, and it doesn't mean to make a deal just because you've invested your time in analyzing a deal and don't want that time to go to waste. It means when you hear about a deal you go find out about it NOW. You don't stop to ask your buddies, you don't go get a haircut and you darn sure don't sleep on it.

Here's a story about a deal that I did back in the early 1990's. I lived in Houston and had a good paying job and also had my Realtor's license, strictly for being able to attend the RTC auctions in person. One Friday at lunch I picked up The Greensheet and was sitting at my regular job desk when I came upon an ad that read: "ABC neighborhood (about 2 miles from my office, 7 miles from my home, so within my active farm), 3/2/2, $35,000, discount for cash. Call xxx."

Since cash was how I was doing my deals I was very interested. I called the number (cell phone were an expensive rarity) and the message told me to leave a number and my call would be returned after 5:00 PM. I went to the Realtor's office and used the criss-cross directory and found the name of the phone number's owner. Then I looked on the Harris County Appraisal District by his name and found not only where he lived, but 3 houses on one street in the neighborhood in question. 

I drove to the street and saw 3 FSBO signs and determined which of the 3 was the 3/2/2. Confirmed with the neighbors that the other models (tract homes built in late '70s) were 4 bedroom. Gave the house a good going over from the outside, determined that short of being a wreck inside that this could be a slam dunk as a buy and hold rental. I called the guy back and left him a message that I was very interested and he could page me back from wherever he was or that I'd be at the house from 4:00 PM onward. He paged me about 3:30 and said he was leaving his office and heading over. By the time he arrived I had already filled out a purchase agreement leaving the price blank.

He showed me the inside and it was in pretty good shape. Re-paint a couple of bedrooms, clean the carpet, general cleaning and it's ready to rent. I asked him about the "discount for cash" mentioned in the ad and he said he'd discount the $35,000 by 20% ($7,000!) for cash. The following is the way our negotiation went, notice I'm not a very smooth negotiator!

Me: So, 20% of $35,000, that would make the net price, um, I'm not great at math but about $23,500?

Him: No, that would make it $28,000.

Me: Are you sure? I was thinking it's more like $24,000, more or less.

Him: No. It's $28,000!

Me: Well, let's just say $25,000 and close enough.

Him: Look fella, the net price is $28,000. If you don't want it say so.

Me: OK. I've got a purchase agreement all filled out, I just need to call my termite inspector to come over, and he can be here in 30 minutes or so and we can wrap this up.

Him: Uh, how about I make it $26,000 and you skip the termite inspection?

Me: Well now I want the inspection more than I did a minute ago! "I'll run to the 7-11 and page him, he'll be here in 30 minutes."

Him: Hey, if you've got that kind of cash are you interested in the other house? One is under contract but the other isn't.

Me: As long as it's going to $35,000 or less.

Him: I can let you have it for $32,000 cash.

Me: Let's go see it.

Now, here's the point of my story. I headed to the Realtor's office to do a few things and make some copies and two of the other agents said: "Hey, there's an interesting ad in the greensheet. 3/2/2 in ABC neighbor, $35,000, discount for cash. I think I may call the guy tonight or tomorrow."

I just smiled at them and said, "yeah, maybe you should do that." About an hour later one of the agents came up to me and asked why the ****-eating grin? You already have that house under contract, don't you? I said, "no, I have TWO of his houses under contract. The greensheet came out at noon, I had seen the house by 2:30 or 3:00 and had both of them under contract by 5:00. If it sounded like a great deal to you why were you 'thinking about it' at 5:30?'

I called my brother in CA to tell him what his end of the cash would be. The first one rented for $650/month and the 4 bedroom for $700/month. We sold them both, seller financed, in the 1995-2000 time frame for $77,000 and $83,000. 

In the Marine Corps they have saying that they have a "bias toward action". You have to do the same to get the deals