I was contacted by a seller a few hours ago. He inherited his mother’s home an now he wants to sell it. The home is owned free n clear. I am a little worried about pursuing the deal because the home is in a rural area of a very big metropolitan area. It has rental property written all over it. I am planning on going out to see it on Friday.
Details:
Living Area: 648sf
Lot Size: 9800sf
2 beds
1 bath
ARV: $50,650
Repairs: $6,000 (just an assumption based on what he told me and the size of the house)
Intial Offer: $10,650
The home is actually situated in a national forest and is in an area where there is a huge lake with lots of lakefront communities.
My problem is finding a buyer to wholesale this property to once I have it under contract since this is my first time dealing in this area.
Advertise and Market for free for a few days or a week and see if you can snag an end buyer for it, also check to find out average days on market, if you can't find an interested buyer, pass on it as I am betting average days on market are huge!
GR
I guess you are suggesting working backwords. If so, how will I know what value to use as I would not have an actual offer agreement. I wouldn’t want to make an offer without being ready to put it in writing. I’ll pick up a greensheet and newpaper to have a starting point for potential buyers in that area when I drive to the property today.
Work backwards from the standpoint of finding potential buyers, you can get names and phone numbers by running ads stating all the specifics without price, then when someone calls tell them your working out final numbers but believe you can make them a smoking deal with walk in equity and the price will be below $40k you believe! Or the price will be below $35k you believe with $6k estimated in repairs and clean up!
Then you can go make offer, negotiate a contract and give yourself 60 days anyway to close, then tie up one of these contacts as your specific end buyer!
First off, don’t make him an offer before finding out what he will take. “If I paid you all cash and closed quickly what would be the least you could accept?” followed by, “Is that the best you can do?” If he’s asking $45k there’s probably no deal…you’ll want to know that upfront. Find out if there’s even a basis for a deal before wasting the gas.
You could also try for seller financing as well, especially if you don’t like the number he gave you in question #1 above. This way you can agree to a price higher than you would if you had to pay all cash. “If I could pay you your equity in monthly installments is that something you’d be interested in?” In this case you’ll be offering him an income stream, and hopefully with little to no down payment upfront. You could wholesale this agreement as well, and possibly to an end buyer.