Tricks To Convince A Seller To Go Ahead and Sell?

Question

Hi,

So recently I had a seller interested in selling me their multifamily units. Total of 9 duplexes, 3 duplexes on 3 parcels of land. The property was not on the market, I contacted to them to see if they would be interested in selling some of the duplexes. They called me about 2 weeks after sending them the letter and gave me a price for all of them together. Anyways, I was trying to see if they had any wiggle room in price and in the mean time they talked with their tax accountant/financial advisor and informed me that they no longer were interested in selling them. Not knowing what to say since I was caught off guard by that after all the work and research I had put into trying to make the deal happened, I thanked them for their time and told them to keep my number if they changed their mind. So a week went by and I reached back out to just see if I were able to give them their asking price would they reconsider selling any or all of the units. They replied and told me they would sell the least desirable of the 3 duplexes but this time the price they gave me was more than the original asking price. If I was to buy these I would also want another 3 duplexes they own beside these.

My question is do yall have any tricks to give the seller a little push to sell? Like in my case I might would buy the ones they offered me last but I really want the other 3 duplexes right beside these as well. The 3 they offered me only have an easement to them and the easement is the property line of the 3 I want. Have you ever sent anyone a contract with a price ready for them to sign if they choose to. Should I send them a contract that has both properties for a certain price to show im serious, should I just stick to verbal, or should I just walk away. Any help would be appreciated.

Joseph Hammel · Answer

Are they doing a 1031 out or just cashing out? They might not want to take such a big hit in one year. You could structure a deal where you do seller financing and spread out over a few years the transfer of the properties. There should be someone smarter than me on here that has done this and can go through the nuts and bolts of it. The lower rates in the 2017 tax bill sunset in 2024 (except for corporations) so they might want to move them in that window.

Steven Foster Wilson · Answer

Meeting face to face can help, try to find their pain point for wanting to sell in the first place, then get an idea for why they would / wouldn't sell the others. At the end of the day you cant keep beating a dead horse, you have to know when to walk away.

Jonathan Greene · Answer

I would never use the word tricks when it comes to sellers, even in passing, because it implies that you want to sneak the properties away from them. They know what they are doing, even if they are old, which is why they came back with offloading their dumps at a higher price. I think they are more savvy than you think in what they want. Your best leverage is taking the bad properties with the good properties so whenever someone gives you a portfolio option, you line up the best ones and then use the worst ones as leverage to get the best ones at better prices. If you can get the best ones at the best prices, you can immediately offload the dumps.

Steven Foster Wilson · Answer

Its a fine line. In the wholesaling / off-market business its all about quantity, contacting as many people as possible to get as many leads as possible. Don't get too caught up on this one. Stick to your numbers and work it until something changes, then move onto the next.

Matthew Lindsey · Answer

@Steven Wilson

Thanks for your reply. Its a difficult situation because I'm having to deal through the daughter of the owners since the owners are in their 80's and one of them is in a nursing home. On the first call the daughter mentioned they were interested in selling because of their age. The ones they are offering to sell are the least desirable out of all of them. All the others are all brick buildings and these are off the road, hard to see, lower rents and have vinyl siding. However, the way I have figured it they should still have a CoC ROI of 17-21% at the lower rents. I am very new to the game but from what I have seen that is decent numbers. I don't think they have any attachment to these as they also purchased these but the owners built most of the others. Knowing when to walk away is the issue im having now. When they went up on price I wanted to walk away but I cant help to think I would be leaving money on the table and a chance to build on my portfolio.

Matthew Lindsey · Answer

@Joseph Hammel

Thanks for the reply. I do not believe they would be doing a 1031. The owners are in their 80's and have owned them for over 20 years. I tried the seller financing deal and at first they didnt shoot it down, they wanted to talk with their financial advisor/tax consultant. After their meeting is when they came back and told me they were no longer wanting to sell. It is a difficult situation on my end. I sent the letters to the owners and their daughter is the one that called me back on their behalf stating they would originally sell. So I have to go through their daughter which then has to relay everything to her mother(owner). I might bring up the 2017 bill next time I speak with them. Thanks

Tricks To Convince A Seller To Go Ahead and Sell?

Tricks To Convince A Seller To Go Ahead and Sell?

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