Yellow letter nets 5 Austin properties

[Jon Klaus]

Last December/January I did a compressed yellow letter campaign to a single zip code in Austin.  I was about to get back to cash on a bigger sale that I wanted to 1031 exchange with.  By compressed campaign, I mean I mailed to each owner every 2 weeks instead of every 4 weeks.  I say I, but it was really @Jerry Puckett mailing for me.

I've been using another BP'er @Shane Woods to take my calls and follow up on all the leads.  About mid-December I got one of my yellow letters back with a hand written note from an owner.  She had written down the price she would sell for, along with 3 other addresses in the zip code with prices for them, as well.  I sent a copy of the letter to Shane and he called the seller.

The seller was a landlord with tenant occupied SFRs and duplexes. Turns out there was a 5th property she wanted to include in central Austin.  At first, she seemed willing to sell the properties piece meal, but as time went on she decided she wanted to sell them all together.  She seemed open to seller finance, but after a couple of weeks of Shane talking with her, she said, "I can't deal with this now, call me in a few months."  It was a big decision for her and she was in the middle of building a new home for herself and getting ready to move.

Shane followed up in January, and she was ready to talk again.  At this point, I took over most of the negotiations.  I set up a first meeting with her to look at the properties (I live in Dallas).  I met her and looked (3 SFRs and 2 duplexes) for an afternoon, including meeting some of the tenants.  She did her own property management and had personal relationships with her tenants.  I learned this was very important to her, that she wanted to sell to someone who would treat them well.  I've done my own property management in DFW, so I gave her confidence that I knew how of take care of tenants.

Out of the 5 properties, I really wanted the 2 duplexes, then maybe one SFR, and I wasn't too interested in the last two, one because of location out of my target area, the other one was over priced for my purpose. However, I agreed to buy all 5 because the duplexes were right for me, side by side, in the right neighborhood.

We (Shane) wrote up contacts a few days after, which she accepted.   They included her financing 2 of the properties, me 1031Xing into 3, and her 1031Xing out into another deal.  After a few days, she got cold feet and wanted out.  Through hours on the phone we worked through her concerns, and we wrote up new contracts with very minor changes,  We finally closed in mid April.

All units are occupied, two tenants just renewed at increased rents, the seller is happy, and I am happy.

Yellow letters work, even in hot, competitive markets.  Jerry and Shane, thanks for helping me to get there on this and another deals.  BiggerPockets, thanks for connecting me with these guys