- Texting Strategy – High Equity Listings Up $200K
- Texted them on Friday, March 12, 2021 9:41 AM
- Text Transcription: (Buyer) Hello, I was driving around Antioch and noticed your house. Would you be open to hearing an offr for it? (Seller) Sure (Buyer) Do you have time today or tomorrow to chat on the phone so I can get more info on your property?
4) Phone conversation got started by the seller calling us back immediately. I asked a series of qualification questions then set up a time to meet the seller later the same day at the East Ave house pictured here
5) After meeting the seller at the East Ave house he was only interested in a cash deal. Then he explained to me he had a second house located at RT59. We proceeded to drive to this house to take a look at it
6) Both houses were in a mid construction zone and the seller proceeded to open up to me he was tired of working on both houses and wanted to retire and “just be done” with both places.
7) He said he wanted to sell both of them and would give me a good deal.
8) THE OFFER:
| Cash Offer: I can give you a cash but it comands a cash discount. And if I told you the price we pro wont be friends |
| Or an offer on Terms? 90% of people say whats Terms?!? I go though a terms sales pitch and explain to them what the major up sides to doing so |
| Why would they sell on “Terms” “Agreement for Deed” |
| 1) We can offer them top dollar at $130,000! Most investors will low ball them at 50-100k |
| 2) AS-IS Sale with NO Inspections. Seller just has to clean the interior and exterior of the property. |
| 3) We will remodel to a safe and clean condition and use it as a rental |
| 4) They will make an additional $$$$ on the interest! Its like they are selling the property for $160,000!!! |
| 5) Buyer makes all future repairs and maintenance |
| 6) It s a win win or seller and buyer |
9) After presenting the “terms” offer to the seller verbally he was in agreement.
10) The next day I prepared an 2 purchase contracts and 2 Agreement for Deed agreements to be signed by the seller
11) Structure of the deals
Rt59 House Breakdown:
$130,000 purchase price, 5 year term on 30 year amm with a 4% rate, payment was $1,000 per month, I pay all closing costs on both sides
No payments to the seller for 30 days. Gives us a head start to remodel the house and present it to tenants.
$4,956.23 in remodeling costs
Rents for $1,600
Cash flow before expenses $600
Exit strategy: Refi in year 4.5
East Rd House Breakdown:
$68,000 purchase price
$185,000 – $200,000 ARV
2 Year Term on 30 year amm with a 4% rate, payment was $700 per month, I pay all closing costs on both sides
$55,000 remodeling budget
$123,000 All in plus holding costs and closing costs
Exit Strategy Fix and Flip with potential profit of $60,000-$77,000
Take aways:
- Repour building is good but its NOT everything. Building a repour is great to get the get to know you stuff out of the way and by building credibility but ultimately its about the money and the sellers urgency/ want to sell. If you can fulfil their “need”, structure the deal so its a win/win.
- You snooze you loose. Time kills deals. As soon as the seller expressed interest in the deal I dropped everything I was doing and went for the meet up. Don’t act to eager though or you can loose advantage. I told him I just happened to be at another house I owned in the area and could come by in a few hours.
- Get good at terminology and writing contracts. Learn the legalities of what you can do and what you cant do in contract writing
- Pass the deal off to your attorney for review afterword, order title, give earnest money to YOUR attorney to hold in escrow and record the memo with the county.