Attorney · San Diego, CA · Member since 2020 · 40 posts · 11 votes
Hey all, since many of us are cooped up in the house, and since I am new and want to engage with the community, I figured I'd ask this fun question:
Who would consider themselves to be the King or Queen of lowballing?
I know that many consider lowballing to be a bad thing, but I come from the school of thought that a property is only "worth" what someone is willing and able to pay for it, at the time that it is being sold. With that said, I consider myself to be a coupon clipping, money-saving, value squeezing, bargain hunter and I get inspired by hearing stories of people who scooped up properties for great prices. I do the same in the stock market.
Does anyone have fun or inspiring stories about offers they've had accepted, due to whatever reason, that came in super low from the ask or comparable sales? I'm talking like 25% or lower, like a property listed at $1m that someone closed at $750k without there being some kind of major structural damage found in the property.
Any tips for coming in super low that you all have found to work, or at least, keep the negotiation table open and hot?
Let's hear em', folks. King or Queen of successful lowballs!
Residential Real Estate Agent · Delray Beach, FL · Member since 2010 · 115 posts · 83 votes
6y
In November 2009, depressed, like many here, ...a victim of the "real estate bubble" and the horrible economy (the "the dark days of 2008"!).
I get an unsolicited email saying, ..."21 bank owned vacant Florida parcels". As a "real estate junkie", I guess I "couldn't help myself", so I "Googled, researched, did some due-diligence (I.e., Google "street views", etc. and more!). Most of these 21 acre lots were about 1/2 acre each and some were 1 acre. The 21 parcels, ...all looked "pretty cool"!
So I then called the listing agent who emailed me, introduced myself and asked was it possible to "make an offer", a "package deal" for all 21 vacant lots.
These 21 parcels were listed by the bank for $8,000 each. I made my offer: "I offered $1,200 each!" The listing broker (actually the listing broker's son), shouted, "that's crazy!", the bank is asking $8,000 each!" I told Preston (the Broker's son), ..."look we are both fellow agents (Realtors), so kindly submit my offer to the bank". Preston said, ...well, ok!
I "wrote-up" the deal, emailed my offer (contract) to the Broker. And guess what? I got a phone call the next morning from Preston (I.e., the Broker's son), ...Mr. Dobbs, "I just can't believe it!", if you can close by the end of the "bank year", they accepted your offer!
"To make a long story short", this was the beginning of a "11-year relationship" with this bank. ------> "I purchased well over 500 vacant parcels" from this bank.
I was basically, "the bank's real estate REO enema" for small vacant parcels, for over 10 years"! Yikes!!!
This story didn't end with me buying bank-own parcels. Building a great relationship with the title agent (who did the closings for this bank), Amanda (the title agent), introduced me president of the local Habitat for Humanity. To make this "long-winded" story shorter, I bought hundreds of donated vacant parcels that people from "all over the country" that donated "real estate bubble" parcels to Habitat for Humanity. Over the years, my relationship grew with Habitat and now we do "land swaps" (I'm very, very proud to say, "well over 50 parcels of mine that I "land-swapped" with Habitat, now have a "Habitat home" on my lots. Wow!
I may not be the "King of Lowballing", but I have carved-out a "10-year chapter" in the "Book of Lowballing", LOL!
Over and over again, I keep hearing the "same olde line", ..."Mr. Dobbs, I can't believe they accepted your offer"!
Robert Dobbs, Trustee Settlor of the Land Rescue League Trust and The Renaissance Trust
Rental Property Investor · Ithaca, NY · Member since 2015 · 1k+ posts · 1k+ votes
6y
@Jack Fernandes
Can’t say this is a low ball story but I got a seller to pay 20k concession on a 85k house and had the bank finance the rest. Then afterwards refinanced and had the bank hold the whole note. Maybe I can be the King of Wonky Investing Strategies.
Can’t say this is a low ball story but I got a seller to pay 20k concession on a 85k house and had the bank finance the rest. Then afterwards refinanced and had the bank hold the whole note. Maybe I can be the King of Wonky Investing Strategies.
Maybe I should change the title to "Negotiation wins/Battle stories." I'd consider that a win, Nick. Thanks for sharing. How did you convince the seller to pay the 20k concession? Any tips or lessons that you brought out of this deal?
I personally am a huge fan of wonky strategies in alternative investments. One of my pharmaceutical companies is developing an antidote to nerve-agent exposure to protect the US military from chemical weapon attacks, which shows that I'm always looking for opportunities to create value in places that others have overlooked.
Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
6y
I definitely wouldn't say I am the king of low-ball offers - I think my offers are fair - but in the spirit of this thread I have bought several homes at less than 50% list price. Two of those were estate sales and a couple of others were foreclosures.
Probably my best deal was a house that was listed for $115 that I bought for $50k cash. Today it is worth about $140.
Rental Property Investor · Erie, PA · Member since 2015 · 1k+ posts · 2k+ votes
6y
@JD Martin has me beat. Of the lowest offer VS listing price I ever bought: a duplex that was listed at around $66K for $45,000. Every rental I have purchased was for less than asking to varying degrees.
Of course, the more work that needs done the lower the offer. I bought a nice duplex in MO to live in - although I bought it for less than asking it was like 7+% under asking (they had dropped the price once previously) as it was nicer than 95% of duplexes on the market with better cash flow than the others (maybe with the exception of one that was smaller but still very nice).
Also, it's the largest duplex that was on the market and so its price per SQ.FT. was a good amount lower compared to many of the 2000 and newer builds.
All offers/negotiations are unique. My first multi-family purchase (quadplex) is my favorite property. It was priced well but since the PM was inept and it was half vacant and needed work they accepted my offer (83.5% of asking but a sweet deal - the one property I own I will likely never sell).
Rental Property Investor · Concord, GA · Member since 2015 · 3k+ posts · 3k+ votes
6y
Ironically, (or maybe not) the lowest price I ever paid for a house was also our "worst" deal. It should eventually turn out ok but we've owned it 5 years and have sunk a boatload of money in it and have yet to get a single rent dollar. Soon, soon, hopefully.
We don't have any amazing deals but we crunch numbers and make offers based on that. It doesn't really matter to us what the ask is, our offer is based on what we feel the ARV is and then we work backwards from that. We throw out our number and see what happens. Our offers are always no contingency cash offers. (that helps sometimes).
Thanks all for contributing. Some really interesting deals so far!
Has anyone come in way lower? I'm talking $200k below list price. I'm in SoCal so would love to be inspired by some post-2008 crash deals
I don't think it would be terribly unusual to have a 200k spread in a $1 million market; that's 20%. I know of a few properties by me that have voluntarily dropped their list by that much. That kind of movement in the $300-500k range would be significant.
Investor · NY · Member since 2017 · 23 posts · 24 votes
6y
I was lucky to close on a poconos house ( 3000sqft , 4 BR,3BA , Game Room ,big loft, Fully furnished and turnkey) that was originally listed for 315k. I ended up closing up on it for ~200k and the seller also threw in a swanky 20k side-by-side UTV.
Hey all, since many of us are cooped up in the house, and since I am new and want to engage with the community, I figured I'd ask this fun question:
Who would consider themselves to be the King or Queen of lowballing?
I know that many consider lowballing to be a bad thing, but I come from the school of thought that a property is only "worth" what someone is willing and able to pay for it, at the time that it is being sold. With that said, I consider myself to be a coupon clipping, money-saving, value squeezing, bargain hunter and I get inspired by hearing stories of people who scooped up properties for great prices. I do the same in the stock market.
Does anyone have fun or inspiring stories about offers they've had accepted, due to whatever reason, that came in super low from the ask or comparable sales? I'm talking like 25% or lower, like a property listed at $1m that someone closed at $750k without there being some kind of major structural damage found in the property.
Any tips for coming in super low that you all have found to work, or at least, keep the negotiation table open and hot?
Let's hear em', folks. King or Queen of successful lowballs!
Close rate will be low on these so it's all about volume. Things that will increase the low close rate will be quick closings along with no contingencies.
Thanks for the feedback. Good tips! Anyone else? Let’s keep the advice flowing. Deal hunters only in this thread!
Nope. Fairly simple. Sellers want 3 things.
More Money
Easy Transaction
Quick Transaction
Most sellers value #1 above all else. If you can't or won't give sellers #1 you'll need to make up for it with a high volume of offers providing sellers with #2 and #3.
Investor · Cleveland OH · Member since 2020 · 20 posts · 3 votes
6y
@James Wise, I just came up here 3 months ago from fort Myers FL. My niche is vacant land, but working on getting some properties under contract as we speak in the Cleveland area. Since I'm new here, I've been networking to find some strong local investors and high volume wholesalers. Just yesterday I spent two hours driving up and down E 93-E115 off Superior looking for my first deal in the area. Any advice or knowledge you could kick me about the real estate game up here would be greatly appreciated. Especially since I'm transitioning from land to properties, I'm hungry for any and all knowledge I can soak up from someone who is a professional in the field. Thanks brother. By the way, I'm working on closing a rental in North Ridgeville now, I'm trying my hand at a creative subject to on that one
Residential Real Estate Agent · Delray Beach, FL · Member since 2010 · 115 posts · 83 votes
6y
In November 2009, depressed, like many here, ...a victim of the "real estate bubble" and the horrible economy (the "the dark days of 2008"!).
I get an unsolicited email saying, ..."21 bank owned vacant Florida parcels". As a "real estate junkie", I guess I "couldn't help myself", so I "Googled, researched, did some due-diligence (I.e., Google "street views", etc. and more!). Most of these 21 acre lots were about 1/2 acre each and some were 1 acre. The 21 parcels, ...all looked "pretty cool"!
So I then called the listing agent who emailed me, introduced myself and asked was it possible to "make an offer", a "package deal" for all 21 vacant lots.
These 21 parcels were listed by the bank for $8,000 each. I made my offer: "I offered $1,200 each!" The listing broker (actually the listing broker's son), shouted, "that's crazy!", the bank is asking $8,000 each!" I told Preston (the Broker's son), ..."look we are both fellow agents (Realtors), so kindly submit my offer to the bank". Preston said, ...well, ok!
I "wrote-up" the deal, emailed my offer (contract) to the Broker. And guess what? I got a phone call the next morning from Preston (I.e., the Broker's son), ...Mr. Dobbs, "I just can't believe it!", if you can close by the end of the "bank year", they accepted your offer!
"To make a long story short", this was the beginning of a "11-year relationship" with this bank. ------> "I purchased well over 500 vacant parcels" from this bank.
I was basically, "the bank's real estate REO enema" for small vacant parcels, for over 10 years"! Yikes!!!
This story didn't end with me buying bank-own parcels. Building a great relationship with the title agent (who did the closings for this bank), Amanda (the title agent), introduced me president of the local Habitat for Humanity. To make this "long-winded" story shorter, I bought hundreds of donated vacant parcels that people from "all over the country" that donated "real estate bubble" parcels to Habitat for Humanity. Over the years, my relationship grew with Habitat and now we do "land swaps" (I'm very, very proud to say, "well over 50 parcels of mine that I "land-swapped" with Habitat, now have a "Habitat home" on my lots. Wow!
I may not be the "King of Lowballing", but I have carved-out a "10-year chapter" in the "Book of Lowballing", LOL!
Over and over again, I keep hearing the "same olde line", ..."Mr. Dobbs, I can't believe they accepted your offer"!
Robert Dobbs, Trustee Settlor of the Land Rescue League Trust and The Renaissance Trust
@James Wise, I just came up here 3 months ago from fort Myers FL. My niche is vacant land, but working on getting some properties under contract as we speak in the Cleveland area. Since I'm new here, I've been networking to find some strong local investors and high volume wholesalers. Just yesterday I spent two hours driving up and down E 93-E115 off Superior looking for my first deal in the area. Any advice or knowledge you could kick me about the real estate game up here would be greatly appreciated. Especially since I'm transitioning from land to properties, I'm hungry for any and all knowledge I can soak up from someone who is a professional in the field. Thanks brother. By the way, I'm working on closing a rental in North Ridgeville now, I'm trying my hand at a creative subject to on that one
Portland, ME · Member since 2012 · 616 posts · 550 votes
6y
I purchased one property at $520,000 below asking price. It was priced too high, but the sellers probably could have made around $200k more than they did. I included in my Letter of Intent the reasoning for the purchase price. I was shocked when they accepted!
One thing that I've learned over the years is that if you have taken the time to analyze a property and the realistic purchase price comes out way below the asking price, you might as well take a bit more time to make an offer. A few years ago I went to an auction preview of a former nursing home about an hour away. I have a good relationship with the code enforcement officer in the city, so he joined me for the tour. He didn't see any problem with my plan to convert it into apartments. The bank was owed about $1.2M. I did the analysis for turning it into normal rentals by combining some of the rooms. It turned out that the most I could bid would be about $650k. Since the auction wasn't advertised as "absolute", I didn't bother driving the hour to attend. Only one guy showed up, and he got it for $170,000!!!
Real Estate Broker · New York, NY · Member since 2020 · 6 posts · 17 votes
6y
@ Jack Fernandez
been buying and selling foreclosures for 30 years. We went to the foreclosure auction on this piece and the attorney for the bank told my partner they were letting it go for any bid and walking away. So he bid $1 and that was the only bid. But he didn't have any cash on him, just the usual denominations of certified checks we brought to the auctions to bid (smallest = $1,000). So he turned to a friend and asked to borrow a dime, but all he had was a quarter. The auctioneer said "10% deposit of 25 cents, purchase price is $2.50" and apperently everyone had a good laugh over it.
After paying back charges, attorneys fees, eviction, renovation, carrying, etc we sold it for $32,000 and made a total profit of $200 between 3 partners. So whenever anyone tries to say how it's "easy money" flipping foreclosures this is the example I break out.
Investor · USA · Member since 2015 · 325 posts · 447 votes
6y
@Jack Fernandes
I am not one to “kiss and tell” but why not...
I used to have an old strategy called the "dogs of the MLS". I would look at a low price point and put in over 365 days on the market. These homes were the worst of the worst in the worst time to sell (09-12).
Anyways, I was watching a house that was on and off the multiple for a few years. It started at 250k. Was actually a nice little place but had a foundation that was totally destroyed by anolid beetles. I kept watching it. The price was down to 185k, I put in an offer for 160k cash.
They were definitely looking to unload it. I bought it from a super scammy HML. I had no problem negotiating super hard. There was tons of back and forth. I ended up getting it for 127k. I was pushing for 100k but I will take what I can get.
The reno was like 20k with the foundation and cosmetic remodel. I did all the labor so that was pretty much my material cost. Last appraisal was around 350 or so, probably higher now.
What I prided myself the most in was the stack of agent cards. I put them in a large ziplock bag and counted them after I listed the property for rent. 75+ agents had shown the property!
