All Forum Posts by: Doug Pretorius

@Don Konipol This is a horrible example to try to sell your point. If the auto industry hadn't tanked in Detroit that 7500 sq.ft. house would be worth a hell of a lot more than $485k, probably more than the NYC coop. Also neither buyer paid below market nor was all that concerned about the market price. And neither buyer was buying as a investment, but rather their personal residence.

If anything your story illustrates that you can't know what the future market will bring. So you're better off focusing on finding profitable deals today and not resting your hopes for profit on unsure appreciation.

@Robert Burns When I was doing a lot of mailers I got 2 to 3 times the response from postcards but the quality was much better with letters. Even though my postcards did have a prequalifying message on them I found that most people who called were just curious if I was interested in paying full price in cash. My letters on the other hand had much more detail and the people who called had often pre-sold themselves on my offer. Instead of calling out of curiosity, they were often calling to set up an appointment to sign.

I did try to put all those other postcard leads into a database and follow up on them. But I never managed to close a deal down the road. The initial response from motivated sellers were the only deals I got.

So If I were to do more mailers again now I would go with letters just so I don't have to deal with a bunch of tire-kickers.

Hope that helps and of course YMMV.

@Bill B. In Ontario you can raise the rent to whatever you want after renovating the unit. The tenant does have the right to reoccupy after the reno but they have to take certain steps to qualify and few tenants are that well informed or organized. Practically too it's unlikely the tenant will want to move back after getting settled in their new place.

@Duane Alexander Who do you call/text?

@Account Closed Honestly for this situation it would be better for the seller and yourself to have the the hard talk and get him down to a price where it will actually sell. But being a good friend I can see how that would be especially uncomfortable!

The seller is only motivated by greed at this point. You'll have to wait and see if he becomes more reasonable as his move date approaches. If he's not willing to lower his asking price from $450k he's probably not going to accept say $30k for his equity and to stay on the hook for the mortgage.

@Christian Requejo The only thing that's BS is doing any kind of deal with no money or prospecting. You have to get in touch with people somehow, either by spending your time calling, knocking, emailing, networking etc. Or your money with mail, PPC, signs, text blasts etc.

The reason you keep hearing the same advice over and over is because it works. Everything you listed will work because you will be making contact with people. Depending on the lead type 1 deal in 300 isn't bad. Why does calling/knocking/generating 300 leads not make sense to you? Just because other people are doing it? The fact that other people are doing it is a good sign, it means there's money in it. If there was no competition it would only mean there's no money to be made.

@Account Closed You don't need any of that. This isn't a listing appointment where you're trying to sell the seller on hiring you.

If you haven't already done so over the phone you need to ask them questions so that they voice their pain point (can't afford payments) and the situation causing that pain (death/divorce/disease/job loss). Then you offer your solution (take over payments). If they're truly motivated they will usually have 1 or 2 minor questions and if you answer those confidently and satisfactorily, they'll sign.

Here's a rough transcript of an actual appointment I was on and is typical for sub2 appointments:

ME: "Thank you for inviting me over to buy your house!"
SELLER: "No thank you!"
ME: "Would you like to give me the grand tour?"
SELLER: "Sure!"

After the tour, sitting down at the kitchen table:

ME: "You mentioned on the phone that the payments were becoming a problem for you."
SELLER: "Yes. I bought this place with my girlfriend last year and right after we moved in I found out she was cheating on me. Then less than a month after we broke up I lost my job. I've gone through all of my savings and even borrowed money from my dad to pay the mortgage but I haven't been able to find another job that pays enough to keep it. I called the agent that helped me buy it but she said I don't have enough equity to cover the commission to sell it. So now I just want out, I'm thinking about letting the bank just take it back."
ME: "I'm sorry to hear about everything you've gone through this last year. Would it help if I took over your payments?"
SELLER: "Oh my god YES! Can you do that? I mean I owe more than the house is worth."
ME: "No problem. The mortgage will stay in your name until I refinance which I will do when there's enough equity."
SELLER: "This is great. What's the next step?"

And that's when we signed the purchase agreement.

@Anthony Michael The market all across Canada is collapsing. My local market peaked in February at an average house price just above $1 million, as of August it's down to $750k. All of the big banks are predicting a 40% decline by early 2023. I think that might actually be conservative.

That's probably not going to happen in the US though. Our prices were already wildly unaffordable before the pandemic and they rose another 60% during. Our banking regulators made a huge mistake by allowing amortizations to become fluid. While technically the longest amortization period you can get is 25 years, they've been allowing people to take out larger and larger loans with the same payment, effectively increasing amortization to 60+ years. That along with interest rates that fell to 1.68% (the lowest I saw) caused this this insane appreciation which is now in the process of disappearing.

Doesn't that normally only apply if the agent was the procuring cause? For example if @Edgar Ruelas viewed the property while it was listed or called the agent for info or made an offer that fell through etc.

@Brady Ascheman No, that would mean I'd be going through the bank's qualification process which is the same as getting my own mortgage. The whole point of creative financing is not to have to qualify for loans.

The bank doesn't care where the money comes from. They only care that the person on the mortgage is still ultimately responsible.