In December of 2016 I sent out 500 direct mail letters to duplex owners in SE Portland. One of those letters landed with a couple in Woodstock whose family had owned a duplex for 70+ years. With almost no knowledge of values or negotiation, I just began spending time with the couple, learning about their desire for selling and discussing my desire to buy. At the time, I ended up buying a different duplex because they just were not ready to sell. About a year later, I was in the midst of a major life crisis; My dad had just passed away and shortly after my marriage was abruptly ending. Life felt totally out of control. That's when I got a call from the sellers. The wife said, "Okay, we are ready to sell."

I had no money. No plan. And very little mental strength to put a deal together at the time. When it comes to getting a deal done, sometimes 50% of a deal done right is better than 0% of a deal that falls apart. That's when I called Mike Nuss from RareBird and told him about the deal. This was a duplex on a corner lot with a large back yard. We looked it over and realized there were 3 historical lots of record; it could be split into 3 total lots and we could sell two of them and keep the duplex. I didn't have any experience with lot confirmations but I had spent 2 years nurturing this relationship. Mike and I met with the couple and put together a deal that worked for us all. It was the price they wanted, $550,000, and the slow closing timeline we wanted, to get the lot confirmation plan approved by the city prior to closing.The plan was for RareBird to buy the property with cash first and then RareBird would sell me the duplex at a discount once the lots were confirmed. RareBird would make their split in cash at the sale of the lots and I would make my split in equity with a discounted purchase price of the remaining duplex.

I managed the relationship with the sellers and raised some of the private money. Mike managed the lot confirmation and some repairs the city required. He also brought the majority of the private lending. In the end, we sold the lots to a developer for $289,000. After some holding costs, renovation costs etc the project created a net profit of over $200,000. We determined the value of the remaining duplex was $525,000 so Rarebird sold me the duplex for $425,000. I used a conventional loan and it now cash flows $500 a month.

I'm grateful for the partnership I had with RareBird to make this deal work.

Mindset tip: If you find a deal, the knowledge and the money will follow. Focus on finding the deal and nurturing seller relationships over a long period of time. Some sales will happen quickly and others will be a slow dance. Patience is key.
My favorite moment of the entire transaction was a few days before closing when the seller called to tell me this, "These past 2 years, I have received many offers from other investors. Each time I would tell them, 'No, I already know who I am selling to; it's Melissa Dorman. We have been slow dancing for a long time."

Portland, Oregon

4 Votes