Hello bigger pocket family! I’m a new investor and have followed BP for over 2 in the shadows and finally decided to join the party in November. BP has been very instrumental in my education towards becoming a RE investor.
I have 3 agents I’m currently working with in my area who provides daily updates of listing based on the scope I’ve given to each. I’ve also made several offers on homes over the last 6 months and all have been either out bided or turned down so I have not had my first deal as yet but I’ve gotten some great education going through the process.
One thing I've learned very quickly is, there are tons of people doing RE investment especially in my area and distressed home don't last long. Also cash buyers run the game. Based on my credit I'm trying to close my first deal using conventional financing, VA Loan or 203K etc…
I recently started my first DM campaign of Absentee owner and people with no mortgages or significant equity in their homes.
This is my first campaign ever so I don’t know what to expect. When I receive the first call I was so nervous I almost didn’t take the call even though I had a script.
It was an older woman screaming that I must stop sending her letters and stop driving by her house and no her house is not for sale. (I’ve done none of what she mentioned. I didn’t send yellow letters I sent yellow hand written postcards) It’s obvious she’s being targeted by investors.
Call # 2 was similar to call #1 but they threatened to go to the media if I didn’t stop sending letters.
Call # 3 is why I’m reaching out to the community.
Call # 3 is from a person who has a property he wants to sell. He quickly went into insisting he not looking to list it with anyone and just wants some to cut a check. He also says I will not find anything in the area that matches what he has so don’t come back saying I can’t find anything in the area. (He very brash and aggressive and wants to control the conversation)
My assumption is he’s tried to sell the property before and was offered 80K because he keeps throwing that number around as what he would never take.
He claims it’s a 3/2 ranch that’s vacant and sits on 5 acres of land that he owns free and clear of any mortgages or issue with liens or taxes. Asked what he wanted for the property? He responded by saying I should make him an offer. At the time when he called I was driving and told him I would call in the morning when I’m back in the office to discuss the details further and he agreed.
I immediately reached out to one of my agents to provide as much information as possible of that property. I also took to the internet and went to the public sites (Zillow, realtor.com etc..) and couldn’t find a picture of the residents nor a selling price.
I also found all of them had limited information on the property and listed it differently, meaning one list the place as a 2/1 1900 sqft, another listed a 3 /2 with 1900 sqft and realtor listed it as a 5 / 3 with 1900 sqft. At this point my confusion grows. The agents responded with 3/2 comps and I got a full CMA but it had nothing close to the acres and 2 structures. Typically, 1-2 acres' lots are in the area with very expensive homes. This house is not in a subdivision.
At this point the seller has no idea where I’m located (which is minute away from the property) so I decided to drive by the property and have a look myself so when I call in the morning we can have a more meaningful conversation.
From the outside the house needs repair and sits on a sprawling wooded lot with cattle wire fencing in the entire 5 acres. Shortly after arriving I met a neighbor walking her dog and she wanted to know if I was purchasing the house. A conversation grew from there and she gave all the dirt on the seller:
(he and his brother bought some land in south GA and build a new house and has neglected this house for over 10 years until recent the county stated getting on him and he finally came and cut the grass and remove the vines growing on the house)
Great information! She also points out another structure in the back of the property which at first I thought was the neighbor’s house, also belongs to the seller.
Armed with an idea of what the house now looks like and the additional structure, I had my call this morning.
Turns out the structure is a 60 X 40 building. ½ of the building has 2 huge garage doors and this is where he parked his RV’s and had a workshop. the other side of the structure has (according to him 2 bedrooms and a wooden deck on the side (so you can come outside on the deck and enjoy the view I guess)
He says he rented out one of the rooms back in the days and a water heated broke and messed up the downstairs bedroom and he never fixed it up. Now I see why the different listings.
So the property has 3/2 in the ranch and another 2/1 in the 2nd structure and both sits on 4.77 acres.
The issue I’m having now is, there are not a lot of homes with 5 acres and 2 structures to compare.
The house was built in 1983 and I he paid 200K for the house but we can’t find anything in the area that is similar to this deal. There are no 5 acres’ lot with 2 structure w/ over 1900 sqft that total 5 beds and 3 bath in the area.
Closest comps:
Sold 6/12/19 3 / 2.00 built 1997 sqft 1,762 Lot 0.56 $per sqft $125 Price $220,000
Pending deal 3 / 2.00 Built 1999 Sqft 1,860 Lot 1.17 $per sqft$132 Price $245,000
My question to the community is this:
- Do I just focus on the 3/2 ranch on 5 acres and not take into consideration the 60 X 40 structure that houses 2 bedrooms and 2 RV garage?
- How much emphasis do I put on the 5 acres’ lot?
- How much emphasis do I put on the 2nd
structure?
- Because the home has been vacant for so long what should I look out for?
- What's the best was to determine what this property ARV would be once we visit the inside and determine the repair cost for the house and the structure without any existing comps to match?
I sorry for being long winded but I wanted you to share my experience. At this point I’m feeling a little over whelmed like the dog who spend his days chasing cars and one day he actually catches one and don’t know what to do with it 😊 I’m totally up for the challenge and plan on nailing this deal but I need some advice.
Thanks in advance for all your help and feedback!
