How to tackle this potential deal!?
Hey everybody!
So I have run into a situation and was wondering if I could get some advice from everyone on what you all think. I’ll give a run down of the deal so you guys have a good idea of what I’m looking at and then I’ll let you know what I’m thinking.
Run-down: The property is a quarter acre corner lot located in Southwest Colorado. The lot is set for electricity, plumbing, and water. It sits right next to a golf course and has a few houses already built around it, but for the most part is pretty empty in the surrounding area. It is just up the street from the golf course club house, is in the mountains, and has great views. Surrounding comps have sold for an approximate average of 28.4k with most recent purchases in quarter 4 of 2021. The seller is hoping for 30k but has had the lot for a while and wants to get rid of it. There is a $1000/year cost for HOA and water. My family member is the realtor for the property and I have told them I am willing to offer 20k (I know it's low). It's currently off market now and we just found out another buyer is interested in the property.
What I'm thinking: my original thought was to put in an offer at 20k and if the buyer comes back with a counter then go no higher than 23.5k. If he accepts, then I would hold the property for another two years or so in hopes of making a solid ROI considering how much they keep building around it and other comps that have gone for more. Now that there's another buyer interested, I'm thinking about wholesaling the property to this potential buyer. I understand the wholesaling process, but how would I begin this conversation. I don't want to talk to the seller first because it is a very slow market there. I am afraid that if I guarantee a deal and the buyer backs out then I won't have an exit strategy besides close on the deal. Then, I don't want to talk to the buyer first, tell them I can sell them the property for X amount and have them go direct to seller with the same price I'm offering. What do you guys think?
Also, Apologies for how long the post is. I hope this made sense and any advice/input would be much appreciated. Thanks!
Most Popular Reply
Like most wholesale scenarios, you would have "and/or assignee" after your buyer name on the contract and try to get a two week option/inspection/due diligence/feasiblity period so you can do you investigation on the property and determine if it works for you as far as utility availability, engineering, architecture, talking to the necessary depts at the city (i.e. Planning, Bldg & Safety, Public Works, etc). I'm a full time land broker and I also have a wholesaling business. You can reach out direct if you'd like.