First motivated seller lead

Wholesaling
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First motivated seller lead

Mike Landry
Investor · Montgomery, TX · Member since 2014 · 386 posts · 151 votes

I started a handwritten letter campaign and I have my first lead that I am very interested in.  First off I am not really wholesaling, more just hunting for my own deals so here is the story.

I got a call last night from one of my letters.  The lady is an out of state absentee owner.  She says she is not interested in selling but her ex-boss(also absentee owner) who has a rental house in the same neighborhood is.  I chat with her for a bit and she lets it slip that he needs to sell fast.  I mention I can close fast and pay cash.  Unfortunately the property is managed by a realtor who calls me next.

The realtor starts by telling me that they "might" list it in a month or two, not sure if they need to sell fast, and proceeds to teach me that the prices are running $100 a square foot.  (he also lives in this neighborhood).  He wouldn't give me a price but I told him to talk to the sellers and get back with me.  He also asked if I would buy with tenants in place and I let him know I was open to it.

The house

1500 sq ft, 3 bed 2 bath brick, built 2005

granite, tile, really nicer than what I was shooting for.

Comps $150,000

Current renter lease just expired going month to month.  Lease was for $1400 per month.

top of the line school district, middle of the line neighborhood for the area due to less amenities.  

Low tax rate for Texas.

rapidly appreciating area for now..%10 yoy

What would you guys offer knowing this?

My numbers work at 130,000 if they will let me finance it.  If cash I can only pay $120,000

My reasoning on my numbers

Retail $150,000

less 4 months vacancy for prep and sell ($5600 rental loss)

no realtor for me, don't really need theirs (3 to 6 %, 4500 to 9000)

repair to showing condition savings, staging (at least paint $3000)

I am saving them between $13100 and $17,600 on costs plus time $$$

That is why I am targeting $120,000 purchase price.  Sound reasonable?  

The realtor is kind of a dick.  If he gets pissy do you think I should go straight to the seller with my offer.  So far I haven't had contact with the owner but I have their name and address.

Thanks.

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  • Wayne Brooks
    Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
    11y

    4 months of being empty isn't a cost your saving for the seller, it's rented.  Not sure how you're saving the seller $13-$17k by him paying a $9k commission.  Seems you agree dead on with the realtors value.  If by "being a dick" you mean the realtor thinks he could net the seller more, then yeah most of us realtors are dicks.  The owner is the one who had the realtor call you, so he likely trusts him.  I had a recent investor tell an owner it was a mistake to involve me as an agent.  His offer was $110k for a house needing rehab.  A week later I got her a cash offer for $137k, and helped her get a $5k reduction in her quoted pay off the morning of her foreclosure trial.

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  • Brandon Kargol
    Fayetteville, NC · Member since 2014 · 59 posts · 20 votes
    11y

    I know you said you aren't going to be wholesaling the property, however, you're going about this like a wholesale deal. So a couple things.

    1. When someone says they want to "close fast" or "sell now". That means absoutely NOTHING. Because every single seller wants to sell as soon as possible. No seller lists their property and wants it to sit on the market for 4 months. They are selling because they literally want to sell and they want it to sell as soon as possibe. So don't get to caught up when someone says they want to sell now, because that is every single seller in the market.

    2. If the seller has a contract with the realtor to list the property then you CAN NOT negotiate with the seller directly. From what said it sounds like, this realtor is not a dual agent. He/she is only representing the seller I assume? That being said the lower the offer you make the less the agents commission will be. Your only option to avoid the realtor fees would be to wait until the property becomes an expired listing (if it doesn't sell) and then you are free to talk with the seller directly.

    3. Is your offer out the ball park? I don't think so, but it doesn't matter what I think. What matters is whether the seller accepts or not. Make the offer, worst case it's declined. No big deal.

    4. I am very confused with your numbers that you say are "saving" the seller money. A seller who lists a property with a realtor isn't that pressed for time on selling the property, so trying to get a price discount by claiming to be saving them time probably will not work. Also, you said the property is being rented on a month by month basis so at this time there is no rental loss.

    At the end of the day just make the offer that works for you. There is no harm in doing that. I don't know why a realtor called you when the property isn't listed on the MLS. I'd figure out if there is a realtor in the negotiation or not.

    Hope this helps

    Brandon

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  • Mike Landry
    OP
    Investor · Montgomery, TX · Member since 2014 · 386 posts · 151 votes
    11y

    thanks for the points. I should say that their property manager contacted me. I'm not sure if they halve signed a listing agreement with the property manager. I'll be contacting the owner directly to find out.

    Wayne???? You just called most Realtor dicks. I didn't. I know plenty of non dick Realtors, friends and family. Maybe most of them are in Florida?  I kid????

    Sorry.  My numbers arent that clear and i guess i don't know their true holding costs if the house is vacant.  Bottom line is it costs money and time to remove a tenant, prep a house, and sell it with a Realtor. What value time has is up to the seller.  I'm sure they could sell it to an owner occupant for around 150,000 if they had time. But tenant occupied.... Don't think so. The agent even had a sense of relief when I said I could buy it tenant occupied.  

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  • Mike Landry
    OP
    Investor · Montgomery, TX · Member since 2014 · 386 posts · 151 votes
    11y

    thanks for the points. I should say that their property manager contacted me. I'm not sure if they halve signed a listing agreement with the property manager. I'll be contacting the owner directly to find out.

    Wayne???? You just called most Realtor dicks. I didn't. I know plenty of non dick Realtors, friends and family. Maybe most of them are in Florida?  I kid????

    Sorry.  My numbers arent that clear and i guess i don't know their true holding costs if the house is vacant.  Bottom line is it costs money and time to remove a tenant, prep a house, and sell it with a Realtor. What value time has is up to the seller.  I'm sure they could sell it to an owner occupant for around 150,000 if they had time. But tenant occupied.... Don't think so. The agent even had a sense of relief when I said I could buy it tenant occupied.  

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