lead with equity, what now?

Question

Here's the scenario:

I am a new investor.  I found a lead from my probate list.  Found out that there is a lot of equity in the property, Seller wants to sell, but we can't agree on a price.  I want to wholesale the deal but the numbers won't work.  Seller said house is in decent condition with no major repairs, but I haven't been to the property so i don't know for sure.

What are my options?  I feel like there's a solution but from my limited experience I can't come up with anything.  Help please!

David Torres · Answer

Hey Mario,

I had the same question as Winston as far as what the numbers were. If you don't mind me asking what kept you from going out to see the property? Talking to the seller in person might allow you to build rapport and get a better feel for what repairs are needed. That way, in the near or distant future, if circumstances change, they'll come back to you. Great job with the direct mailing.

Dave

Winston Spence · Answer

Mario T.

Before you do anything, whats the numbers on the potential deal?

We cant help you if we don't know what numbers are being discussed

Chris Kennedy · Answer

Mario,

I agree we need to see the potential numbers to give you more accurate advice, and I agree with David Torres (especially if you're just starting out) - go meet the seller anyway. It's great practice whether you make a deal or not.

That being said, here are some other options (in no specific order) you can consider:

1. Ask the seller if they would be open to holding a note on the property. If you have some cash and they will take little to no down payment, you could purchase it for yourself to hold as a rental property for monthly income (the numbers must make sense and you need some cash reserves for emergencies!)

2. Ask them to give you an exclusive option to sell the property for 30-90 days. Try for a super low option fee ($100), agree on price and terms up front, and then go to work marketing for a buyer. Even if you only make a small assignment fee on the sale, it will be great practice and you can start finding buyers for future deals.

3. Same as above but not as great for you, get a non-exclusive option to sell. They can still market for a buyer or list it, but you also have an option to buy if you bring them the price and terms agreed to within the time frame of the option contract. Worst case they sell it first, but you might be surprised how easily you find a buyer when you put some effort into it!

4. If you have a real estate license you can refer the lead to a full time realtor for a 25-35% referral fee (do this one time and you probably cover the cost of getting the license in the first place - that's my number one reason for why investors should get a real estate license).

Go meet the seller and keep us posted!

Mario T. · Answer

You guys are amazing.  Thanks for steering me straight and for the different perspectives.

I didn't want to believe it but I needed to accept the cold truth.  If it's not a deal, don't force it.

On a side note, this was my first post to the forum and I am blown away by the support this community gave me.  Thanks again!

Pete T. · Answer

Remember just because they want to sell and there is equity, doesnt mean they want to give away more of the balance.  I would focus on the price that meets your criteria and if it doesnt work, keep moving.

Jeremy T. · Answer

I agree with @Chris Vacek  time to move on to the next one.  Continue to market to them, as they may be motivated to meet your price in the future.

Account Closed · Answer

If you have a buyer increase your offer and closed the deal. Be honest with the seller whom you are not the buyer all you are interested in is selling your agreement to a buyer. If you cannot  agree on price offer the seller $2000 non refunded fee to let you tie up the property for 60 days until you find a buyer.

Joe Gore

Chris Vacek · Answer

Seller wants to sell, but we can't agree on a price.  I want to wholesale the deal but the numbers won't work.

I think that's your answer right there.  Your only real option is to increase your offering price but if the numbers aren't working it looks like this deal is not working.  Sometimes you can't just "Make" a deal work unfortunately.

lead with equity, what now?

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