I have a list of possible deals, what do I do now?

[Chad Duncan]

I went through a small town near where I live and looked at every street and house that was older  (1910-1930) that needs TLC. I have created a list of roughly 45 homes within a 5 square mile radius. This town is an up and coming neighborhood that I believe is going to be one of the biggest appreciation markets in Oregon. (Not speculation) I did my research and asked the county and local builders at their projections of building, roads, markets etc.

My questions is "What is the best way to approach the owners of these homes?"

A lot of the people who own them do not have any payments, they are either paid off or they have a ton of equity. Some are owner-absentee and the home is sitting there rotting. I absolutely love the style of these homes and plan on fixing the home to its original state. 

What are some of your ideas as to not only approach the owners to sell, but also my negotiation standpoint when approaching them?

Thanks for your time!

[Rick H.]

Originally posted by @Chad Duncan:

I went through a small town near where I live and looked at every street and house that was older  (1910-1930) that needs TLC. I have created a list of roughly 45 homes within a 5 square mile radius. This town is an up and coming neighborhood that I believe is going to be one of the biggest appreciation markets in Oregon. (Not speculation) I did my research and asked the county and local builders at their projections of building, roads, markets etc.

My questions is "What is the best way to approach the owners of these homes?"

A lot of the people who own them do not have any payments, they are either paid off or they have a ton of equity. Some are owner-absentee and the home is sitting there rotting. I absolutely love the style of these homes and plan on fixing the home to its original state. 

What are some of your ideas as to not only approach the owners to sell, but also my negotiation standpoint when approaching them?

Thanks for your time!

 You have just described speculation. You are making a bet, perhaps an educated guess, but just the same, a wager that average home prices in a given community will increase.

People who buy with short term gains in mind are speculators; they often just don't know it. Long term buy-and-hold investors speculate gains, too.they just don't try to realize their gains via sale but rather by increased rents or financing the increased equity.

As to how to approach? Shotgun or rifle? Out of 45 candidates, one of two may be motivated, however your criteria is based in what YOU think, not what the owner wants to do, necessarily. 

Frankly, that's not how I'd build a list, however if that what you're going to use, then start by ranking your 45 properties by owner's equity, length of ownership and age of owner. 

If any owners are deceased, owe back taxes or are in default on a tiny mortgage, they go on your priority list. If all three, they go on the top.

Most newer people blow off door knocking and miss the value of talking to owners in casual conversation. They usually favor an ineffective letter or postcard because they're cheap and too lazy (but no one tells them this; I do!). 

Go back to your hit list, talk to owners and neighbors, too. Don't try to close anyone just yet. If they have an interest, it'll come up naturally when you tell them you want to buy a house in the neighborhood and want to know who is getting ready to sell but hasn't listed with an agent yet.

Anyone who's motivated enough to drive and research 45 properties will find something to buy if they are persistent as well as consistent.