Please critique offer. (by NE [PA]) Jun 11, 2018 6:27 PM|
Please critique offer. (by Ken [NY]) Jun 11, 2018 6:38 PM
Please critique offer. (by plenty [MO]) Jun 11, 2018 6:43 PM
Please critique offer. (by MJ [OH]) Jun 11, 2018 6:43 PM
Please critique offer. (by Nicole [PA]) Jun 11, 2018 7:26 PM
Please critique offer. (by Dave [MO]) Jun 11, 2018 7:40 PM
Please critique offer. (by Tom [FL]) Jun 11, 2018 7:55 PM
Please critique offer. (by JB [OR]) Jun 11, 2018 8:22 PM
Please critique offer. (by LiveTheDream [AZ]) Jun 11, 2018 9:49 PM
Please critique offer. (by Jim In O C [CA]) Jun 12, 2018 2:14 AM
Please critique offer. (by razorback_tim [AR]) Jun 12, 2018 3:57 AM
Please critique offer. (by Vee [OH]) Jun 12, 2018 4:49 AM
Please critique offer. (by Ken [NY]) Jun 12, 2018 4:49 AM
Please critique offer. (by NE [PA]) Jun 12, 2018 5:08 AM
Please critique offer. (by NE [PA]) Jun 12, 2018 5:13 AM
Please critique offer. (by S i d [MO]) Jun 12, 2018 6:18 AM
Please critique offer. (by Tom [FL]) Jun 12, 2018 11:50 AM
Please critique offer. (by NC INVESTOR [NC]) Jun 13, 2018 7:43 AM
Please critique offer. (by NE [PA]) Posted on: Jun 11, 2018 6:27 PM
Seller wants 50k for his deceased mothers house, he grew up in it. He owns it outright. Off market deal.
Full rehab could fetch 99-115k for a flip, needing 24k to complete project. Offering $30,500 cash
Could rent as-is for $700 needing $6,000 for some basics. Offering $35,788.
I could turn and burn flip it doing almost nothing for about $2,000-$3,000. I would list it at $69,000 and should get $59,000. Offering $39,000.
The offer prices are explained in the letter.
This is the letter I plan to send him.
Hello Mr. Seller, thank you for taking the time to show me your house the other day.
I've worked up a few scenarios that may work for the property. I don't know your personal situation, so I am providing a few for you to look over and choose from.
The 1st option I came up with was $39,000 for the house. I would like to put $3,000 down and pay $200 a month interest only until I can get it sold and pay you $36,000 when I sell it. This would be for a maximum of 10 years, but could be as short as 6 months. The $200 a month works out to 6.6% interest per year on the $36,000.
The next option I have would be to pay $30,500 cash as-is for the house. I don't want anything fixed with this option and will take care of any and all issues with the house. I can close in 2 weeks of acceptance.
The 3rd option will get you the most money, but requires flexibility on terms. This option will give you $52,576 total. The purchase price will be $36,788. I will give you $1,000 down and $149 per month for 20 years at 5.25% interest. This will give you an additional $15,788 in interest.
Like I said, I don't know your personal situation. I am open to any option, as all will work for what I do with homes. I also have references from people who I have done other deals with similar to this.
Please let me know as soon as possible as I am looking at a few different properties.
Thank you for your time. I look forward to hearing from you soon.
Please critique offer. (by Ken [NY]) Posted on: Jun 11, 2018 6:38 PM
Why send a letter?Cant you meet him at the house and start asking questions? --72.231.xxx.xxx
Please critique offer. (by plenty [MO]) Posted on: Jun 11, 2018 6:43 PM
You both agree... The house needs the money?
Twice you write that u don't know his personal situation.
Why do you say that?
Please critique offer. (by MJ [OH]) Posted on: Jun 11, 2018 6:43 PM
Unless you know he is a sophisticated seller, I agree with Ken. Meet in person and explain each option. You will confuse him in a letter. --174.105.xxx.xxx
Please critique offer. (by Nicole [PA]) Posted on: Jun 11, 2018 7:26 PM
If he has any business sense at all, he'll turn you down for #1 and #3..... what is the advantage to him other than a few extra dollars and a lot of risk.
#2 is the best ... depending on his circumstance and his wants/needs of cash. --72.70.xxx.xx
Please critique offer. (by Dave [MO]) Posted on: Jun 11, 2018 7:40 PM
I agree with meeting him.
#2 would be my recommendation.
$35,500, cash, close when title work is complete.
This is the way I like deals simple clean and clear cut. --159.118.xxx.xx
Please critique offer. (by Tom [FL]) Posted on: Jun 11, 2018 7:55 PM
The 6.6% interest
5.25% interest are too low for seller financing. If I was the seller I am taking a risk with owner financing.
A higher interest rate and a higher down payment similar to hard money lending.
HOWEVER that being said if the seller is in the mind set to unload the property he or she may take the money at a much lower rate and more power to you NE of PA.
Cash is KING so make a lower offer than the $30,500. maybe $25,000 and let the chips fall where they may. He may take it. OR tell you to hit the bricks but you don't know until you ask!!!
Best of Success!!! --99.56.xx.xx
Please critique offer. (by JB [OR]) Posted on: Jun 11, 2018 8:22 PM
Just to make it even messier, you may want to talk to him about selling on a lease option. --50.45.xxx.xx
Please critique offer. (by LiveTheDream [AZ]) Posted on: Jun 11, 2018 9:49 PM
Tom - I just sold an investment property. We got many offers (like 15) - 12 of which I didn't even respond to they were so ridiculous. Like $100,000 under asking on a $270,000 property. Seriously, in 50 years around real estate I have never encountered so many absolute idiots. Everyone reads sites like this where people buy for 10 cents on the dollar, or watches HGTV and listens to these "gurus" saying if their offer isn't insulting it's too high.
Well folks I'm here to tell you that more often than not if your offer is insulting - you just lost the property. I won't even respond to people who are more than 10% under asking. There are desperate sellers and there are people who WANT to sell for a relatively fair price, but don't NEED to. Knowing the difference is paramount. --47.216.xx.xxx
Please critique offer. (by Jim In O C [CA]) Posted on: Jun 12, 2018 2:14 AM
Any offer more than 10% below my asking price is used as a coffee coaster. --75.22.xx.xx
Please critique offer. (by razorback_tim [AR]) Posted on: Jun 12, 2018 3:57 AM
Do you know what he’s planning to do with the Cash?
That will determine whether he finds owner financing attractive or not.
If he won’t come off his price offer him $50K with $1000 down and 196 payments of $250.00 or something like that.
Non-recourse, no due on sale clause. --70.178.x.xx
Please critique offer. (by Vee [OH]) Posted on: Jun 12, 2018 4:49 AM
I agree with Ken, you go there and draft a purchase contract - why explain your intention (they are subject to change anyway), your intention is to purchase and let him go away happy, if the offer is declined then you go away happy. --76.188.xxx.xx
Please critique offer. (by Ken [NY]) Posted on: Jun 12, 2018 4:49 AM
Meet with him and ask questions,why do you want to sell? are you current on the mortgage and taxes? if they wont answer then they are not desperate enough,often they will tell me the truth and then tell me the whole story,i think that is because they cant tell family and friends out of embarrassment but they will tell me because they believe I can help them.Then I create a solution that can work for both the seller and myself and often that ends up being a way better deal for me than it would have been if I just started throwing numbers at him.Lots of times all they really want is out from under the problem whether it be unpaid taxes,mortgage or even tenant problems,they don't even care if they get any cash as long as the problem goes away.First thing is you need to know where he stands with the taxes,call the taxing authority so you know for sure but still ask him because that isone item you can confirm if he is telling you the truth or not and they all seem to know if they are current or behing on taxes. --72.231.xxx.xxx
Please critique offer. (by NE [PA]) Posted on: Jun 12, 2018 5:08 AM
Backing up quickly, I get the mortgage and taxes information out of them during the initial phone call. I also get out of them why they are selling in the initial phone call. Then sometime during the showing, I get the mortgage and taxes information again from them in person along with why they're selling. I act like I don't remember discussing that with them just to see if they say anything different the second time to check for any holes in their story.
The mortgage and taxes are current on this property. There is no mortgage actually. He is selling because he lives about an hour away now and can't get up to work on it like he likes to. I asked him what he would do if he can't sell the property and he said he will either keep it or keep it for one of his sons. To me, that puts his motivation out about a 75%.
I'm not 100% sure that I can close this deal that's why I was just going to mail him a letter. If I was a 100% sure that I can get this deal, I wouldn't have posted this and I would have it under contract already.
I can go back and show him three offers in person, I have never done that though so I wouldn't really know how to present three different offers other than on paper. He's not going to really care what all I have to do to the property to get it to a full remodel condition or anything like that. He cares about his situation. I asked him where he came up with this price and he said some online research. Bogus #.
He wants the money to fix up some things around his own house. He's not desperate for the money, from what I can tell. That's what changes the game a little bit.
The numbers that I presented in that letter will make the property work. It's just a matter of getting them to work for him.
So for anybody that would present multiple offers in person, how would you go about doing that? I'm better at laying stuff out on paper then I am explaining it in a conversation. Which I think is how this would need to happen, more in a conversation style than a math class style. --174.201.xx.xxx
Please critique offer. (by NE [PA]) Posted on: Jun 12, 2018 5:13 AM
Also, anybody that saying that they won't entertain an offer below asking or more than 10% below asking, you have to realize that you are looking at it through an experienced investor/sellers eyes. Most of the people that I buy properties from have no clue what they are worth, have never sold a property before and will probably only sell this one property in their life. I have bought properties for 90% off of asking price. --174.201.xx.xxx
Please critique offer. (by S i d [MO]) Posted on: Jun 12, 2018 6:18 AM
NE, I agree you're on the right track to make different offers and let him choose. That said, let's get that letter as simple and easy as possible.
Bullet points. Get rid of sentences. Example:
* Sale price $39,000
* Down payment $3,000
* Seller financing, $200 per month, interest only.
* Balloon payment in 10 years of $36,000. No penalty for early payoff.
Outline the rest of the options this way. No flowery or unnecessary language.
Keep is simple.
Please critique offer. (by Tom [FL]) Posted on: Jun 12, 2018 11:50 AM
LiveTheDream of AZ, Congrats on getting your investment property SOLD!!!
You got many offers (like 15) - 12 of which you didn't even respond to they were so ridiculous. I disagree with you to ignore the 12 low ball offers. Sure they were ridiculous. And maybe they were idiots! Buyers are wanting the property for the lowest price and sellers are wanting for the highest price and there is a middle ground. AND its possible that a seller may have a bidding war on the property due to a hot market. There are several that can not afford the asking so they are testing the water to see what happens. OK so they move on and you move on. Make the counter offer, plus depends on contingencies as well.
So what if it's $100,000 under asking on a $270,000. Make a counter on the offer.
Some buyers that continue to make low ball offers and have looked at 20 to 50 properties. THEN maybe they will realize they are in a hot market and need to adjust their offers in the future. OR it may not be time for them to buy. OR they need to focus on their affordable price range.
NE of PA, I would go below the 10% rule and make the low ball offer. Now the seller can continue to have expenses holding the property for his son. If the seller wants to hold the property NE of PA will move onto the next offer, more power to him.
Buying distressed properties is a risk for the investor/flipper/buyer.
Best of Success NE of PA...
Please critique offer. (by NC INVESTOR [NC]) Posted on: Jun 13, 2018 7:43 AM
My experience as a Realtor is that the more options you offer the harder it is for them to a) grasp and b) decide.
You need to remember that very few people buy or sell frequently and are generally overwhelmed by the process especially with estate sales.
Figure out what YOU want to do with it and make him that offer while listing the benefits to him. He needs a starting point. Let him accept or reject or modify. If he rejects it ask him what he is looking for and guide the conversation from there. --71.75.xx.xx