OfflineI reached out to a probate house a while ago. The personal rep called me and said I could come look at the prop today. I got there and met the brother, nice person. Looked at the house. It needs about 40k to bring it to market price, which is about 330-350k. House needs kitchen and all 3 baths gutted and redone. Every room needs paint and flooring. He is in complete denial about the costs of repair and it current condition. He said its all cosmetic and it not that bad, someone could move in as is!! I said nothing, cause it would not have ended up being a good conversation. Keep in mind he got this house FOR FREE!!! there is NO mortgage. He says I need at least 300k. I said, well market is about 330, and there is a lot of work to be done. He said, so what were you thinking. I said about 200. He said oh no, no, no. I said, well sounds like you need to put it on the market and wait it out and see if you get close to market. He lives in Florida...have fun traveling back and forth and waiting 6-9 months, while paying electric, upkeep, lawn service, leaf service...oh and the Realtor's 6% when it sells
Now he got this house FOR FREE...FREE!!! and 200k cash is not good enough!?!?!?! Like I said it needs about 40k to fix. I just don't understand why people have to be so greedy. He got the house for FREE, and I am offering him 200k cash and a fast closing.
I was planning on assigning it for 10-15...
How do you deal with people that have no clue, and think investors offers are insulting? We have A LOT of costs associated with our business...and our cash buyers want a great deal
oh well...
D
Don't Wish the Past, Create the Future! - DH
He'll get back to you. Blessings to all. LA
Everytime you repeat the words "I CAN DO IT" with conviction, you cancel or override your fear and increase your confidence. By repeating this affirmation over and over, you can eventually build your courage and confidence to the point where you are unafraid. -Brian Tracy-
He is also going to have to pay property taxes and insurance on the place.
If you really don't want to give up on it just yet, here's what I would do. Grab your checklist form with all the things interior and exterior. Go down the list and start checking off everything that needs to be done. Also, is there any mold?
If there is that much going on inside, I'm willing to bet it also needs a new roof and exterior paint. What shape are the windows in? What shape are the pipes and electrical in? Does it have an air conditioner and does it work? How about termites?
After you check off all the things that need to be done, figure out conservative numbers for each repair/replace. Since he thinks people could live in it as is, if you offer him the highest numbers he will think you've just pulled them out of the air to support your case. If you want to put the effort into it, you could offer him a range for each repair/replacement.
Then go on Zillow, Trulia, or Redfin and find comps in his neighborhood. Find the ones that offer interior and exterior shots of the prop and print them out. He wants $300K without putting anything into the place? Ok, so show him $300K comps with nicely remodeled interiors, beautiful kitchens with granite counters, and lovely bathrooms. I don't know if you took pictures when you were in his house but if you did, attach a pic from each room of his house to a pic from each room of the comp house. Then ask him, if you were searching for a new home, and you could have either your house or the comp, which would you buy? Hopefully, he'll get the point.
You'll also have the list of needed repairs/replacements. Start with the $300K he wants which is also what the comps are priced at. Then start subtracting. Tell him these fixes will make his house look nicer, but that since you didn't figure on higher end fixtures like the comp has (granite and possibly ss appliances, etc.), that even after all the things on the list are taken care of that his house will not be able to compete with the nice comps. Tell him if he wants to look at the higher end fixes (if you offered him a range) he will see that in order to compete he is going to have to put a sizable chunk of cash into the property. And then mention that list of other things he will be paying for every month as well until the property is sold plus that 6% commission. You might also want to mention he will be losing money as well until the house sells because that 200 grand could be generating interest or investment returns.
Send it all to him, let him stew for a few days, and make contact. If he is still totally resistant, fine. You've done everything you can. If it's still unsold after a month or so, you might want to follow-up with him.
Cindy
Life isn’t about waiting for the storm to pass…
It’s about learning to dance in the rain.
The most difficult thing is the decision to act, the rest is merely tenacity. The fears are paper tigers. You can do anything you decide to do. You can act to change and control your life; and the procedure, the process is its own reward. - Amelia Earhart
"The greatest mistake you can make in life is to continually be afraid you will make one." - Elbert Hubbard
He be back..
max
Commit to the Lord whatever you do, and your plans will succeed.
Prov. 16:3
"I am talented. I am creative. I am greatley favor by God. I am equipped. I am
well able. I will see my dreams come to pass."
Joel Austin
I agree. He will call back and the ball will be in your court!
all...and Cindy nice detailed info!
Don't Wish the Past, Create the Future! - DH
I just like to be proactive in situations like this. If you just sit and wait for him to come back, just about the time he's ready another investor may get to him first and there goes the deal. If you lay out for him the reason for your offer, once he understands where you're coming from he'll probably appreciate the time you put into it and will call you first to offer you the deal. Or better yet, he will have seen the wisdom of your ways and will take you up on your offer in your first follow-up call (if he doesn't call you first).
Good luck and let us know what eventually happens.
Cindy
Life isn’t about waiting for the storm to pass…
It’s about learning to dance in the rain.
The most difficult thing is the decision to act, the rest is merely tenacity. The fears are paper tigers. You can do anything you decide to do. You can act to change and control your life; and the procedure, the process is its own reward. - Amelia Earhart
"The greatest mistake you can make in life is to continually be afraid you will make one." - Elbert Hubbard
Just a quick question. If you were going to offer 200k in cash, why would you assign it? Were you using hard money or did you have a buyer in place that had the cash?
"Whenever you find yourself on the side of the majority it is time to pause and reflect."
-Mark Twain
When I look at probates I keep this sheet with me that shows a breakdown of everything the homeowner will be paying on a monthly basis...and what it adds up to on a yearly basis. Tell them you understand how expensive it is to hold a property and you want to help him out with this problem.
Then show a list of all repairs needed and a cost sheet. IF they say it is all cosmetics then tell them that cosmetic repairs are fine for just someone who wants a basic house...but you work with investors and you have to look at it through their eyes....they want everything above average and want to put enough into it to almost double what they pay for it.
"THE ARCHITECT OF YOUR DESTINY IS YOURSELF"
"SUCCESS WALKS HAND IN HAND WITH FAILURE"