Hi Mr. Smith and thank you for your call. You say you have a home you'd like to sell, please tell me about it? Well I have a 3 bedroom / 2 bath 1400 sq. ft. home in suburban Orlando neighborhood of _____________. It's in decent condition and I got it from ___________. I would guess it has $10,000 worth of deferred maintenance and a decent yard. What is the address?
Well Mr. Smith you know I am a real estate investor and my wife and I will not be moving into this home, in fact it will cost me closing costs to buy it from you and closing costs to sell it to someone else, and 6% in realtor commissions for the listing and buying agents.
Then it’s likely I will have to hold your house for some period to repair it and then to get it sold which means I am carrying all the utilities, home insurance and the property taxes, I am going to have to upkeep the pool and have the lawn maintenance serviced.
Then I am going to have to pay mortgage costs and any fees or points to buy this home and I am in this as a business. This is how I can offer you cash upfront to you without the hassles as I am taking the entire risk and relieving you of debt and further liability!
Please let me get back to you in the next 12 or 24 hours with my offer! I don’t let the seller even tell me at this point what he thinks he wants to get until I get back to him with a price.
Yea Mr. Smith I did some calculating and I can offer you $55k for your home all cash to you with a closing in 45 days! Well Mr. Smith my calculations show the following costs: Verbally you can list these by phone without divulging the actual amount then if the seller asks what is utilities you can tell him $1,400 for an expected 4 month marketing period.
$1,160 Purchase Closing
$1,410 In Points
$6,000 Realtor Commission
$2,500 Resale closing cost
$500 Property Tax
$300 Home Insurance
$400 Pool Service
$500 Yard Service
$10,000 Repairs / deferred maintenance
$2,800 Carrying cost
$5,000 wholesale mark up!
Your not telling your seller these numbers necessarily but your making him aware your going to incur all these costs!
And I still need to make some money for taking the risk! ($13,130) Your end buyers minimum profit. (If I added this correctly?)