The Eleventh Week – Got Another Deal

These are the results of the eleventh week of opening up my business for you guys to see how my wife and I are building back up to 30 deals a year. If you missed the first post explaining what I am doing, please visit This Post.

These are the things I did this week:

Closing Got Held Up
There are two liens on the property, and one should have paid off the other. The seller so far is not able to find any paperwork on the 2nd loan, to show it actually did payoff the first. He says it did, but unfortunately this is a problem that must be cleared. The attorney for the seller says he is working on it. Hopefully, we can get this closed soon.

Made Follow Up Offers
Called on some follow ups to see if anyone has changed their mind. One has and countered with me again. Still not where I need to be, but much closer. I am going back to the house Monday (earliest she could show it) to make another offer. It is much better to make offers in person as it is too easy for the other person to quickly say no on the phone. In person, people tend to consider things more and do not like to tell people no.

Resubmitted an offer on a bank owned property that I had found in the MLS. The days on market are getting close to 60 and I it should be price changing. I want to hit them right before the price change so that I am not competing with several offers that may come after the price change.

Beta Testing Has Started
Beta testing has started on the Lead Manager application. I don’t know if I mentioned it, but it will be FREE. I’ve gotten some good feedback and will make some changes. Hopefully, it will be fully operational within a month.

Prepared Letters For Mailing
It has been 3-4 weeks since I mailed some of the drive for dollars prospects. I printed out a batch of letters and signed each one. Just waiting for our mailing person (family friend) to stuff the envelopes and hand address the envelopes.

Finished New Article For Bigger Pockets
Finished an article entitled ‘5 Things You Should Know Before Talking To Sellers’. I will link to it next week after it’s been published. Here is a part of it:

When you get a call from a seller, you need to ask the right questions to be able to determine whether you should spend more time working on the lead. These are the questions that I ask when a seller calls.

• What is the address of the house?
• How many bedrooms and bathrooms does the house have and is there a garage?
• Does the house need any repairs?
• Why are you selling the house?
• How much is owed?
• What are you looking to get for the house?
• Do you know what similar houses are selling for in the area?
• Is there anything that you do not like about the house?
• If they bought the house recently, ask how much they put down (if not much, probably not doable).
• How fast do you need to have it closed?
• If I were to pay cash and close quickly, what is the least you would be willing to take? (You’ll be amazed at how much below the asking price they just gave you this will be.)
• How did you find out about me? (You want to keep track of what marketing is pulling best.)

Update: This is now a fuller post on 15 questions to ask motivated sellers.

The questions aren’t always in this exact order and are intended to be asked in the normal flow of the conversation. You just need to direct the conversation so as to have these questions answered without seeming too much in a hurry and ignoring what they are telling you. They want to know you are really listening to them. Expand on their motivation to sell by asking open-ended questions. Over time you will develop your own style.
Marketing

Total Leads This Week: 14

1. Bandit Signs – 4 – 50 were put out early last week.
2. Yellow Pages – 0 – For a picture of my ad, visit the ‘The First Week’ post.
3. Buying Website – 8 – For a link to my site, visit the ‘The First Week’ post.
4. Drive For Dollars – 0 – Once the letters are done, I will be mailing out 72.
5. MLS – 2 – These are ones I found myself and went and looked at. I did not included them in the weekly total.
6. Wholesale Deals – 2 – These were both lame so I did not even include them in the total.
7. Referral – 1 – One caller said he got my info from a friend that is a Realtor. I was not familiar with the name, but it was a referral none the less.
8. REO – 1 – Just got this last night and am looking at it this morning. Update: Not good. House needs too much and I just don’t like it.

Leads Analyzed

1. Under Contract From Federal Tax Sale[Source: Website]Investor wants to sell contract on a 3 bedroom, 2 bath, 1300 sf house in a so-so neighborhood.Here are the numbers:
   

   Asking Price:	$60,000
   Amount Owed:	$58,000 (what they have it under contract for)
   Repairs:	$Says Not Much (unconfirmed)
   After Repaired Value:	$80,000
   Max Offer:	$50,000 minus repairs

   Caller’s business partner supposedly has this house under contract from a federal tax sale and could not get financing to buy it. I don’t want it either for the price they have it for. Looking for the greater fool. Next.

2. Handicapped Son Requires Different Living Arrangements[Source: Website]Homeowner wants to sell their 3 bedroom, 3 bath, 2000 sf house.Here are the numbers:
   

   Asking Price:	$Make Offer
   Amount Owed:	Nothing
   Repairs:	$AC out and Cosmetic (unconfirmed)
   After Repaired Value:	$100,000
   Max Offer:	$65,000 minus repairs

   Seller has a handicapped son in a wheelchair and the house is two stories. She wants to get a new house with wider doorways and single story. The neighborhood has high days on market and only the sub 60k priced houses have sold over the last year. I passed this on as a birddog.

3. Wraparound Mortgage Gone Bad[Source: Website]Homeowner wants to sell their 4 bedroom, 3.5 bath, 2600 sf house in a good area.Here are the numbers:
   

   Asking Price:	$No Less Than $250k
   Amount Owed:	$290k
   Repairs:	$None (unconfirmed)
   After Repaired Value:	$270,000
   Max Offer:	$189,000 minus repairs

   Seller relocated four years ago and sold the house on a wrap. The buyer has defaulted and they are getting the house back. They owe way too much, even if they do bring some money to the table. Next.

4. Wants To Move Out of State[Source: Bandit Signs]Homeowner wants to sell their 4 bedroom, 1.5 bath, 1300 sf house in a so-so area.Here are the numbers:
   

   Asking Price:	$45,000
   Amount Owed:	$31,000
   Repairs:	$10,000
   After Repaired Value:	$70,000
   Max Offer:	$30,000

   Seller wants to move out of state and needs to sell the house. I was attempting to sell this one to a buyer that had bought a rental in the same neighborhood several years ago. We had wholesaled the first one to them and they just called a couple of weeks ago asking for more. I’ve set an appointment to show them this house (owner lives there), but they drove by the outside and said they were not interested. The house doesn’t look bad and I asked why they didn’t want it. He started with saying that the shed needed to be tore down. WHAT? The shed is really nice. I guess they are nervous. Will see if they change their mind. I don’t want to buy the house for my self as it is really best as a rental. Said the least she would take was $40,000.

5. City Going to Demolish[Source: Bandit Signs]Homeowner wants to sell their 3 bedroom, 2 bath, house in a bad area.Here are the numbers:
   

   Asking Price:	$25,000
   Amount Owed:	$18,000
   Repairs:	$everything
   After Repaired Value:	$?
   Max Offer:	$Nothing

   Seller needs to sell because the city is going to demolish the house. The city informed the owner that if they find a buyer that intends to repair immediately they would stop the demolition. This would be good for me if the house was something I wanted. In the past, I’ve bought houses like this ‘before’ the demolition hearing and had to go to the hearing to inform them that I was buying and that I would repair it immediately. This one has already had its hearing and is set for demolition in a couple weeks. Even if it weren’t being demolished, what they owe is actually a little much for a house in this area in the condition that it is in. I passed this one on to an investor that I know buys in the area.

6. Wants A Single Story House[Source: Bandit Signs]Homeowner wants to sell their 3 bedroom, 2.5 bath, 1700 sf house in a decent area.Here are the numbers:
   

   Asking Price:	$100,000
   Amount Owed:	$95,000
   Repairs:	$Cosmetic (unconfirmed)
   After Repaired Value:	$105,000
   Max Offer:	$68,000 minus repairs

   No explanation needed really. They owe too close to what it is worth and are not motivated in the least. Next.

7. Plumbing Problems[Source: Bandit Signs]Homeowner wants to sell their 3 bedroom, 2 bath, 1300 sf house in a decent area.Here are the numbers:
   

   Asking Price:	$Make Offer
   Amount Owed:	$95,000
   Repairs:	$Plumbing/Cosmetics (unconfirmed)
   After Repaired Value:	$100,000
   Max Offer:	$65,000 minus repairs

   Seller wants to move because she is sick of the plumbing problems. They owe too much though, so this was a quick, ‘sorry can’t do it’ call.

8. A Church. Yes, A Church.[Source: Website]Pastor wants to sell a church in a bad area. Church has not been active in a while and the pastor is moving to the Dallas area. This is really a rental area so I am passing this one on to a landlord in the area.
9. Tranferring To Houston[Source: Website]Homeowner wants to sell their 3 bedroom, 2 bath, 1500 sf house in a decent area.Here are the numbers:
   

   Asking Price:	$90,000
   Amount Owed:	$88,000
   Repairs:	$Finish Repairs (unconfirmed)
   After Repaired Value:	$105,000
   Max Offer:	$68,000 minus repairs

   Seller needs to sell because he is transferring to Houston in two weeks. He owes too much and is not behind on payments. Have to move on to the next one.

10. How Does This Work[Source: Website]Homeowner wants to sell their 3 bedroom, 2.5 bath, 2000 sf house in a good area.Here are the numbers:
    

    Asking Price:	$Make Offer
    Amount Owed:	$92,000
    Repairs:	$Cosmetics (unconfirmed)
    After Repaired Value:	$150,000
    Max Offer:	$100,000 minus repairs

    Seller is having financial problems and wants to see if he can sell before he gets behind. He was a little weary at first and hesitated to give me his address and mentioned that he wanted to know how it all worked. Being that he called from my website, I am assuming he had not read that part. This is common. I just mention quickly that I need to gather some information about the house and, if everything looks good, I schedule an appointment to see the house. I then walk through the house and can usually make an offer on the spot. From that point on, it is like a normal transaction. I don’t go beyond that, but if they want to know more: If we can come to agreement on price and terms, we will sign an agreement. The agreement will then be receipted at a title company. The title company will do the necessary paper work and a closing will be scheduled. At the closing, after you sign the paperwork, they will give you a check for your proceeds.

    Back to the lead. I am going to see this house tomorrow and hope to put it under contract. Will be tough because they won’t get much from the sale.

11. Divorce and Foreclosure[Source: Referral]Homeowner wants to sell their 3 bedroom, 3 bath, 3400 sf house in a good area.Here are the numbers:
    

    Asking Price:	$170,000
    Amount Owed:	$159,000
    Repairs:	$Cosmetics (unconfirmed)
    After Repaired Value:	$?
    Max Offer:	$?

    Seller is getting divorce and facing foreclosure, a double-whammy of sorts. I think what is owed is just a little too high but did not research it fully. This is in an area where my father invests so I passed it on to him. The problem with some of these more rural areas is the some of the houses were built by amateurs. People building their own house. Some are weird, some are built poorly, some are both. This one was built by the seller’s father. When asked what other similar houses were selling for in the area, he responded with, “There is nothing else like this around here.” Probably not a good thing.

12. Military Relocation[Source: Website]Homeowner wants to sell their 4 bedroom, 2.5 bath, 2000 sf house in a good area.Here are the numbers:
    

    Asking Price:	$180,000
    Amount Owed:	$180,000
    Repairs:	$Cosmetics (unconfirmed)
    After Repaired Value:	$180,000
    Max Offer:	$125,000 minus repairs

    Seller is in the military and is relocating. They owe what is worth so there is nothing I can do. I wish I could.

13. Bank Owned[Source: REO]REO 3 bedroom, 1 bath, 1500 sf house in a so-so area.Here are the numbers:
    

    Asking Price:	$55,000
    Amount Owed:	$0
    Repairs:	$unknown
    After Repaired Value:	$80,000
    Max Offer:	$50,000 minus repairs

    This is a bank-owned house on a busy street in a decent area that has bad pockets. Didn’t want it. Next.

14. Moving Out Of State[Source: Website]Homeowner wants to sell their 4 bedroom, 3.5 bath, 3500 sf house in a great area.Here are the numbers:
    

    Asking Price:	$300,000
    Amount Owed:	$165,000
    Repairs:	$10,000 cosmetics
    After Repaired Value:	$400,000
    Max Offer:	$250,000

    Seller is moving out of state for a great opportunity for her daughter. Her daughter has a great singing voice and has been offered a job teaching kids and singing. They already have a place picked out that they don’t want to lose either. They do not want to miss out on this opportunity and were willing to sell at a deep discount. This price range in San Antonio can be hard to move. The days on market is usually a lot higher and holding costs can quickly get you in the red. The seller had already talked with a Realtor and got her opinion of what she could make and understands the trade off.

    I needed to make sure that I had some extra room in case I sat on the property for a while and needed to do some updating, so I offered $220,000. This was a case where I actually offered a second option with us paying off her loan and her owner financing $85,000 with a balloon after 12 months. They were more interested in being done with everything at closing, so they took the first option. A third option was to buy the house subject to the existing mortgage and work a deal that way, but her payments were much higher being that they included escrow of taxes and insurance.

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Summary

Finally getting some contracts. I feel that a couple are on the verge of accepting. Trying to keep up with follow up as that is very important.

Plans For Next Week

• Make Lots Of Offers
• Follow Ups
• Work Some More on the Lead Manager Application
• Consider signing up for Accurint again.

Here’s a tip:

You simply cannot make an unmotivated seller motivated.

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