First real lead!

[Silvio L.]

Hello BP,
A few days ago I posted that I had sent out my first batch of 50 yellow letters. Well, I've gotten 5 calls! that's 10% response and I'll take that all day long. So today I got my first lead and of course I'm way over my head so I wanted to present some details to hopefully get feedback and see what I should do. Here's how the conversation went:

Me: So what is your situation.
lead: The property is an auto body shop and a lot that fits 10 cars. My father owns the business and the property. My father is 84 and he's tired of running the business. He's owned it 35 years. No mortgage.
Me: What woud you like to have happen?
lead: Well I had just contracted a realtor to list it but when I got your letter I called and canceled with him, I wanted to speak with you first because I don't want to pay commission. I was gonna list for 330-350K
Me: If we could agree a price, how quickly would you be willing to sell?
lead: (chuckles w/ surprise at my directness) TOMORROW!
Me: Ok, let's meet friday blablabla

Ok, so details about the property. First of all, I am not interested in commercial properties whatsoever and I haven't researched ANY info on wholesaling them. That said if there is a deal here I want to take advantage of it. So property is in fact just some old rinky dink auto mechanic shop with a narrow parking lot facing a busy street. Interestingly, the property next to it burned down and the remains were demo'd, it's just an empty lot now. The location is nothing short of excellent. It's in a developing area near a train station, park, waterfront, and sports arenas.

My thoughts (I have no idea what I'm doing): So there is potential in the land but not much in the actual property or business. I'm thinking this would interest a developer who could build a nice multifamily and cash in long term on the location and appreciation. The empty lot next to the property sweetens that more, I think. Does that mean I should offer the value of the land? Would that make it a deal? I have no idea what numbers I should run before talking to this guy and all the research I've done has been with residential properties! I don't think "65% ARV-repairs" applies here and how do I get comps on an auto body repair shop?!?

Any feedback would be greatly appreciated!

-Silvio

[Tim G.]

Disclaimer* I have no knowledge of commercial properties.

You wanna break some pots? I hope so! Cause no matter what taking action is better than sitting around wondering all the scenarios.

I'm always torn, I appreciate the preparedness this forum puts out. The formulas, the advice but sometimes I fear it hinders just going out and trying something a little crazy. Like wholesaling a commercial property for your first deal.

Try your best to comp it out, he wants to move fast and is going to sign with a realtor if you hesitate for a MOMENT. Lock it up, at the lowest price you can with a solid inspection period in your contract.

Then blast that bad boy out, call every commercial realtor in town and offer them 3% if they can bring in a buyer.

Worst case, you back out within your inspection period. This is the worst that can happen, that is nothing. You'll gain so much experience in the process.

Go break some pots man!