All Forum Posts by: Michael King

Hi everyone,

    Let's say there's an older gentleman who owns a multi-family property free and clear. Bought it back in '85 for $30K and is selling it because he lives a good distance away from the property, is older and looking to retire from being a landlord. I'm guessing he wouldn't want to carry back a 30 year mortgage considering he is older. Would a good approach be to see if he'll carry back a 5 to 7 year low interest mortgage with a balloon payment when the 5 to 7 years are over? If so, what are the benefits of doing this other than buying 5 to 7 years of owner financing.

    If I did this, what would be the best exit strategies to use? I would be looking to pass the property off rather quickly as opposed to holding onto it myself for a number of years. Retail buyer? Assign it to another investor?

    Thanks,

                  Mike

Hi Everybody,

    Does anyone have a list of things that you should know about a property before going on an appointment to meet the seller? i.e., what the seller owes on the house, a rough value estimate of the property, a general idea of the appreciation of similar houses in the area, who's on the deed, etc.?

    I've read that you shouldn't waste your time doing too much due-diligence on a property before meeting with the seller, but there must be some information that you need to obtain before the meeting, right?

    Thanks,

                  Mike

Okay, thanks for the answers. I forgot to ask that question, so that's what I wound up doing was going to the registry of deeds site and pulling files for the gentleman's name and the property address to discover there were never any liens on the property. I just wanted something to add in my scripts so I won't forget to ask next time.

    Mike

Hi everyone,

    I am looking for a tactful question to add into my scripts to ask sellers; a. if they have an existing mortgage, and b. what the details of the mortgage are.

    Thanks,

                  Mike

Awesome! Thanks for the response Rob. I look at houses all the time, so I'll know to check all that stuff. I think I was just concerned I would miss some big important thing that investors are supposed to keep their eyes open for. That's a good idea about the contractor too. I'll keep that idea in mind for future appointments.

    Mike

    Thanks for the help @Brian Gibbons , and @Justin Silverio! It sounds like I need to make it my new habit to ask the existing financing question when I am talking to sellers.

    Brian, I really liked your thread. I found it very useful. Do you happen to have the titles or the links to the threads that followed it? I like the bit about parking down the street and walking the two minutes. I wouldn't say I drive a poor vehicle, but rather a small pickup truck - practical for my needs, but not necessarily your standard business-type vehicle.

    Now I'm planning on picking up a nice briefcase before Wednesday, but at the moment I don't have a ton of things to put in it. Pens and miscellaneous items like that are no problem, but to be honest with you I wasn't expecting to have an appointment set up after dialing only 29 people. It has been a goal of mine to get my business cards ordered within the month (waiting on a 1 line fine-print-type "licensed RE professional" disclosure from an attorney to put on the bottom of the card... Figure I better play it safe), and to have some nice glossy tri-fold brochures describing my business printed up within the next 2 months. The attorney is also making some final changes/updates to my lease option contract and offer to purchase. I better call her tomorrow and make sure they will be completed and ready to use by then. What exactly is a presentation sales folder, and a presentation sales book?

    I also really like the idea of walking around taking pictures. Another forum post mentioned using a checklist and taking note of any repairs that may need to be done to the property. That way you can show the pictures and the list or repairs to potential buyers and try to work something out that way. What are your thoughts on that process? It sounded like the guy who wrote it wasn't signing deals up on the spot, but going home and crunching the numbers first, then getting back to the seller with an offer of some sort. I would think it would be smart to at least get a Letter of Intent formed, then do all the due-diligence, right?

    What are the most important things to pay attention to about the property itself?

I've never actually laid eyes on a letter of intent, but had coincidentally asked the attorney about it a few days ago. Waiting for her to make the contract updates, create a one-line disclosure for me, and send over a LOI template. Anyone know where I could find an example Letter of Intent to take a look at and get a feel for how it's filled out?

     And lastly, I assume I can find information on any outstanding mortgages at the registry of deeds right? Would it be a good idea for me to give them a call and see what information they can give me, and/or instruct me on how to find? I took a quick browse through their online site, but it seems a little tricky to navigate. I found the deed showing that the gentleman purchased the property back in 1985 for $30,000, but not too much other information.

    Thanks again!

                           Mike

Hi everyone!

    A couple of weeks ago I had the privilege of speaking with Brian Gibbons on the phone for about half an hour. He is very knowledgeable, and for a newbie like me the information and advice he was able to offer was very valuable. It was nice to talk on the phone with someone and not have to hear any type of solicitation. He certainly seems to know his stuff, and I would absolutely recommend a chat with him to anyone looking for some worthwhile information or coaching.

    Mike

Hello everyone,

This past Wednesday my wholesaling business officially went live! Although I don't have money for mailers or bandit signs quite yet, I have been receiving FSBO and Expired leads on a daily basis. I got myself set up with a nice desk phone in my home office and have started cold calling leads. I do have my real estate license, so I have been checking the Expired leads against the MLS to make sure they haven't been re-listed, and to make sure that the owner is not also the listing agent as I imagine that would be a little bit awkward.

    Wednesday I called my first 23 people. Having never made calls like this before, I am still quite nervous. I am sure that if I stick to it on a regular basis, I will get the hang of talking with sellers and it will become like second nature. But for now, I am focused on learning from every call I make. I have been noting any objections and questions/comments that stump me, and coming up with responses to them. This has proven to be worthwhile on a few occasions and is certainly keeping me on my toes.

Anyhow, earlier this evening I made 6 calls all to FSBO sellers. The 6th caller was the most interesting. An older gentleman answered the phone. I asked him if the property was still available, and if he could tell me a little bit about it. The property is still available, and he described it as a 4 family house. The apartments all have separate electric meters and electric heat, the hot water is supplied by a single 50 gallon hot water heater supplied by the landlord, the house is fully rented, and according to the gentleman it is in close to turn-key condition. He also mentioned that tenant on the top floor manages the property, and the other tenants are kind of shut-ins (and a little bit messy/dirty).

    So I asked my next question: "That sounds like a really nice house, and you said it's fully rented and in close to turn-key condition... Why would you ever consider selling it?"

    His response was, "Well I'm glad you asked. I'm 76 years old, and I want to quit. I live 50 miles away and only drive to the house once a month to collect the rent."

    We chatted for a little bit longer and I told him I was interested in taking a look at the property and would love to set up an appointment to see it. Before he agreed he said, "You forgot to ask me one very important question..."

    "The price?" I asked, quickly glancing at the price on the computer. "I have it down as $179K." I told him.

    He chuckled a bit, "Well actually I recently dropped the price down to $160,000 if you pay the closing costs."

    The gentleman had to come out to this area next week, so he agreed to show me the house next Wednesday at noon.

    So now I am both very excited and very nervous about my meeting! I plan to give him a ring Tuesday evening to both confirm the appointment, and warn him that I am 23 years old but look very young (that way he won't be surprised when there's a 14-year-old-looking kid on his front steps). I will bring an Offer to Purchase form, and a Long Term Lease Option with me to the meeting, but will likely keep them in my truck. I figure I'll talk to him and try to really get to know him, and have him show me around the house while we build rapport.

    I am looking for any sort of instructions or guidance on what to do at this appointment, and what type of deals would work best for a "tired landlord" situation like this? I appreciate any random suggestions that people may have for me as well. My goal is to see if this gentleman will be interested in either some sort of seller financing, a long term lease option, or a subject to purchase (which I don't believe is a viable option in this particular case). He doesn't necessarily seem motivated to sell (besides wanting to hand over his reins as a landlord), but he may be in a situation where he wouldn't mind carrying back some of the financing or doing some sort of terms deal.

    [I do have a few books that have specific steps to follow when meeting with sellers. i.e. build rapport, build motivation, then talk about numbers last (I'm sure there are a few steps that I missed in between). I am definitely planning on re-visiting those books prior to my appointment, but wanted to get this forum post up as soon as possible because BP always seems to get me really good information and feedback rather hastily].

    Also, what is the easiest way for me check and see what the mortgage is looking like. Maybe there's some equity? Is there an easy way for me to check this ahead of time? I know I've read someplace where this information can be found, but I haven't needed to explore that avenue until now, so it hasn't really sunk into my brain quite yet.

    Any suggestions on attire? Nice shirt and tie, or just a nice polo? I'm new to this and don't want to risk doing anything that may scare off the seller.

    Thanks everyone!

                                  Mike

@Brian Gibbons

Hi Brian. Thanks for your good response as always! Very useful information, but would you age the expired listings at all? I've read somewhere that it's sort of unwritten-etiquette to wait at least 3 days, but some people say you should wait 2 weeks before calling them to make sure they don't re-list with the same agent or a different one.

Also, I tried to leave you a bit of a testimonial about our phone conversation a couple weeks ago, but can't seem to navigate to the right place to leave it. Any hints on how to find that again?

    Thanks,

                  Mike

Yes, my first investment and now I'm having issues with the water department that is slowing things up. Hopefully it will all be finished in the next year or so.