Future Success - Crazy Deal

[Andrew Smith]

I leave the Home Depot and realize I missed a call on my business line. Oh well, it was probably just someone looking to sell me SEO again. Of course, I still listen to the voice mail when I get in the truck, and good thing I did! The lady on the other end wants to sell her home to me! This is my first real lead. I didn't know how he got my number, but I sure was glad she did. She left her address and some info and the message was over.

I'm excited. My heart is pounding, I have to remember to breathe. I head home, compose myself, sit down at my desk and call her back. We have a nice conversation and she tells me that she wants $175,000 for her property. We set up a time to meet tomorrow.

I jumped on my computer and start doing my research. I pull comps and I'm astounded. I removed the outliers, actually drove to get a view of the home and the other "comps." I got home, removed one comp because it probably wasn't, but once all is said and done, I'm showing the ARV is somewhere between $308-$315k. I'm still not quite sure. This is my very first real lead, and therefore, my very first real estate deal.

I know how to negotiate, and I will, because I don't want her to think "that was too easy." I'm just thinking to myself, "this is too good to be true." I only plan to wholesale the property as taking on a reno project is not good timing for me know, but there is probably room for me to make $20-30k, even if repairs are $50k. I know it needs a new roof, that was apparent, but there didn't seem to be a ton of work to do on the outside. I know the inside will be dated, so there will be a lot of work in there, but overall I feel like I've got a really good deal on my hands.

Any advice? If you need more info, please ask.

-Drew

[Jay Dewberry]

Welcome to BP Andrew and congrats. It's great to see potential success stories in the making and I hope to add this one to the pile. The first thing that comes to mind is to make sure you analyze...analyze...analyze. From the initial numbers, this does indeed appear to be a good fix and flip in the making. However, make sure to try and build some rapport with the owner. Perhaps you can get an idea of her motivation and why she wants to sell. You want as much info as possible. If your initial visit to the property works out, perhaps try and get the property locked up(contractually). Still try and negotiate a lower rate if possible. MAKE SURE YOU HAVE CONTINGENCIES IN YOUR CONTRACT. Once the property is under contract, get some rahab guys in there to estimate the costs. This could be a good tool to justify a discount...OR...a good tool to justify backing out of the deal. You'll never know. IMMEDIATELY shop the deal after you contract...If it's the deal that it seems to be, buyers will jump on it immediately. Use the BP Calculator...it should help. Just thoughts...either way congrats and keep us updated on your progress.