Last week, via my Handyman Ad, I got a call from a burned-out landlord. This is a classic example of where a newbie investor got into this business 5 years ago and has had nothing but trouble ever since. The school of hard knocks was his only education. His last tenants trashed the house, stole his kitchen appliances and even unbolted the toilet and took it too.

After seeing the inside of this house, I told the investor "I really don't want this house, however, if you really want me to take it off your hands and relieve you of this burden, this is my low-ball offer to do that,...$3,500.00. After some hesitation, he accepted my offer but with one contingency,...I pay the RE commission for his agent. He had this property listed on the MLS for 5 months and got no offers. I agreed to pay his agent's commission of $1,500.00 which brings my out of pocket total to $5K.

I estimate rehab to be around $12K. House should rent for $550.00. Closing will be next week sometime.

Other investors besides me would have objected to paying the RE agents commission,...saying "she is your agent, you signed her contract, and you should pay her out of your $3,500." I felt this investor had been 'beaten-down' enough at $3,500,...so I agreed to pay the agent's commission. I will also pay closing cost too but with all-cash deals, closing cost are usually less than $500.00 assuming my attorney is used.

He took your first offer? You could've gotten it cheaper.

Rookie! Haha just kidding.

NE,

Last February, when it was first listed on the MLS, it was $22K. It was $13K yesterday when I made my deal. I did not know this house was even listed until the seller told me about 'his agent'.

Myob, my personal challenge now after talking to a fellow LL on here is to get someone to pay me to take the property.

NE I'll bet some here have done it.

I don't know if this qualifies but I did soemthing close. 2 guys I knew thought investing was a piece of cake-- all that money to be made. I sold 6 units (sfh's) with owner financing. 5% down. I'll try to make this short) after a year of upgrading and rehabing they weren't making any money and one of the guys came to my office CRYING how bad it was and broke they were. So with 6 recent rehab homes I took them back with deed in lieu of. All good up to here. Then I find out that one house they gave back (with extensive damage had a payout of 30K of insurance claim to them. When I questioned them-- I found out that 30K check also had the mortage lenders name on it. Low and behold that was me. GEE i told the DA-- I never signed that check-- how did my signature get there? They had brought the check to their buddies bank to cash--- he looked the other way until the DA and cops started checking. Guess who got 30K?

Happy for you! :)

Interesting that the RE agent had "had the property for five months" and had "never got an offer" but still earned a $1500 commission on a $3500 sale he had nothing to do with.

NE,

First of all, I do have scruples in my business dealings and I try to be as ethical as I can. I do believe in making low-ball offers but I do not believe it is wise to try to beat a seller down to a pulp where they have no more dignity or pride left. There is a 'delicate balance' here between making a low-ball offer and an offer that is so low that it irritates the seller to the point where he tells you to F-off.

The most I would have paid for this house was $7K. I cut that figure in half and low-balled at $3,500. I was expecting a counter-offer. That did not happen. He accepted my first offer as long as I paid his agent's commission. I agreed. All his agent has to do here is fill out the paperwork and submit it to my attorney.

I would've gotten my own agreement signed right there. Some sort for sure.

To NE and Roy, I'm not sure how this isn't considered a counter-offer from the seller. You offered $3500. The seller basically said, "$5000 and sold."

Jeffrey,

Next time you come to AL, we will have a glass of Sweet Tea at the Waffle House. I did receive the 3 John Schaub CD's. Will view them soon and start planning on doing my 1st Lease Option deal.

JB (OR) - I think the Settlement Papers should read that the selling price of this house is $3,500.00. Agent commission and all other misc. costs are on top of that. In other words, my 'cost basis' should be $3,500 instead of $5K.

That is the way I see it.

NE - I do not understand your LLC question. Can you re-phrase it? I do have an LLC but it has nothing to do with my Advertising.

LOL!!! They took the toilet ?! Do you happen to have one on hand? ; )

JB (OR)

Wow, that is awesome!

I'm selling a place - I took my $6 LED bug lights and left them 40 watt incadesents.

Congratulations, Roy.. It is fun to read those fellow LLs sweet deal stories.. more pls!

The closing on this house is June 14th. Between now and then, I will be making lists of what needs to be done to get this house rehabbed. Today I will take some photos of the house and try to post them here later on.

Next week, when the official rehab begins, I will try to make a separate post and gives updates on what is going on.

With all rehabs, one of the biggest decisions I have to make is how to heat and cool the house. This house does have a Gas Meter which means it has Natural Gas for heating. Again, the big decision is whether to install Central Heat/Air or just 'go cheap' with window A/C units and ventless gas wall heaters.

PF 11