All Forum Posts by: Scott Martinson

Don't listen to naysayers.  If you want to do it, find a way.  Some good advice above about finding where you stand with a loan officer.  Think outside the box for different strategies.  

Maybe you live in a suburb you wouldn't normally consider (Robbinsdale, Crystal, Brooklyn Center.....etc.)

Maybe you house hack with a single family.  Buy something you can do a live in flip.

Listen to as many podcasts as possible.  Find a strategy that will work for you in your current situation.

@Gino Barbaro  Overall my first flip was a success.  I just filed my tax return and the profit was around $27k on my $52k investment.  Closed April 29, previous owner vacated August 10th, listed around Sept 10 and Closed about Nov 10th.  The only thing I would change is to find a handy man type person to do a bunch of the odds and ends that I did (lights, blinds, minor plumbing, etc.)  Now it's time to find another.

Welcome aboard @Evan Uribe.  I sent you a colleague request with a question about the new property.  I think it might be a property neighboring one of my duplexes.

@Gino Barbaro  I just left the seller's house with a PA in hand!  His declined my offer at first.  Said he was hoping for $10k more.  Later that day I went back to his house with a written offer and showed him how my offer came close to giving him that extra $10k.  He was supposed to let me know Monday, but wasn't ready.  I figured the deal was dead.  Called yesterday saying he wanted to get together to review the PA.  Made a few very minor changes and he signed the deal.  I should have a minimum of $20k in profit.  It could be $30k or a bit more depending on my conservative estimates.

I'm not so pumped about the possible profit, but I'm very excited about the learning opportunity.  

Thanks @Gino Barbaro.  I did try to figure out how I can meet his needs and felt I did that.  I wasn't sure if my talking about money was good or not.  I wanted him to understand the extent of normal sales costs and rehab costs.  I didn't want him to think I was just a low-baller.  Would you generally talk about these costs?  My thought was I'll let him know the magnitude of his problem and I can make it go away.  Some of the quotes for work he had were very close to my estimates.

I own 4 Duplexes and 1 Commercial building.  I've been listening to BP Podcasts for over a year learning a ton about RE.  I realized my landscape and lawn care business could be a source of leads.  Sure enough last week an older gentleman was having me out to bid a job. His house is structurally good, but needs updating.  He seemed a bit dejected.  Long story short I made an offer on his house.  My gut feel is I have a better than 50/50 shot at getting it.

I had never pitched a person to BUY their house.  It seems like it should be the other way around!  My conversation with him revolved around the following points:

1)  I could close in a month (I'm not a cash buyer--that's when he was hoping to list which is unrealistic considering the amount of work).

2)  I would buy the house as is (he wouldn't have to worry about inspections and hidden costs)

3)  He wouldn't have realtor fees or seller concessions at closing

4)  He would be able to just move without all the stress of trying to do the rehab. (I tried getting on his side--you know how picky buyers are these days--he agreed)

5)  We talked a bit about the major points of repair on his house so I could make sure we were on common ground (make sure he had a realistic idea of extent of rehab). 

6)  I gave him a "Net Price" (I'll pay his closing costs)  I wanted him to understand his NET very easily

He is seriously considering my offer.  He thinks he has another guy that might be interested, but my hope is he's not viable.  A)  He just bought another flip.....hoping he doesn't have the money or capacity B)  He suggested he wanted to do a contract for deed.  Not sure he can pull that off since the house has a first mortgage.

Considering I had never done a meeting like this I think it was a success.  He didn't laugh or swear at me.  He told me he would get back to me by Friday.  ( I had a contract and tried to write it up).  He actually seemed relieved he might not have to do all that work.

Any thoughts or feedback would be appreciated.  I'm hoping I can find a deal or two like this each year from people calling my landscape business to get work done.

A customer called my landscaping company looking for a quote on some landscaping rehab.  As we walked his property he said he was getting ready to list his house.  He also talked about the many other jobs he needed to do.  I casually mentioned he could give me a quick tour of his house and maybe I would buy it.  A few days later I did another walk through with my Realtor to confirm repairs and costs.  I told him my offer and his first response was "I don't even have a place to move".  I knew that was very positive.  He is going to let me know tomorrow if we can move forward.

My questions is:  He needs time to find a place to move.  I told him I could accommodate that. Here are some options I thought of:

1)  Close a few months out. (Somehow the deal could fall apart)

2)  Close ASAP and have him pay me rent.  (I already have 10 units.....not excited about trying to collect rent from the previous owner).

3)  Close ASAP and have a short term lease that is funded with proceeds at closing. (can this be done?)

I would appreciate any creative ideas.  I want to get control of the property, but give him time to find a place to go.

@Collin Golden just and update about the strategy I mentioned I would use in the future.  A customer called my landscape company to do some work at his house.  While discussing his job he mentioned he was getting the house ready to sell.  As we walked the property he talked about all the jobs he needed to do.  I sympathized with him and asked if he could give me a tour and maybe I would buy the house.  He agreed (this was last Friday).  Yesterday I went back with my realtor and did another walk through.  Realtor and I confirmed my rehab costs and I made him an offer.  Told him I could close in a month (that's when he wanted to list it) or we could wait until he finds a place to live.  He's going to let me know tomorrow.  I felt a little sheepish with my offer, but I spoke with confidence of what I could offer him.  He seemed relieved he had a viable offer that could cover his needs.

My key here is that I was able to find this guy when there isn't a swarm around him.  It might work to my advantage.  Even if I don't get the property it has been a valuable learning lesson.  I wasn't expecting to find a possible deal within a month of my last deal.  Fortunately I like to talk to people and ask a lot of questions in conversation.  I'll keep you posted. 

Put your radar up.  Talk to people.

Look into joining the Minnesota Multi Housing Association.  They can be a valuable resource.

@Filipe CravoYou should be be prepared to wait quite awhile to know whether you got the property or not.  I have purchased one short sale and from offer to closing took about 4 months.  Keep in mind just because the seller accepts your offer does not mean the bank will approve the sale.  A property next to one I own is a short sale and the bank recently rejected a PA that was submitted to them.

It can be an excellent way to generate some equity though if you can wait.