Expert Tips for Handling DIFFICULT Sellers for Creative Financing Deals

Introduce us to this deal, Jessica, and tell us about motivation, what's going on with it. And then certainly we can open up for questions from people as well.

Yeah.

So this home, I called the seller, it's vacant. I think he's been gone for 6 to 8 months maybe. And so when I had called him, he told me that he had it listed with a realtor, it didn't sell, but I believe he has a friend who's a realtor who told him to just hang onto it and essentially do this rent to own. So he, it was a really good conversation. It was super easy because he was already kind of looking to do something like this and just didn't know where to start or have the resources. And so as far as like first conversation to getting a contract signed, it was super quick and easy.

Awesome. Well, I'm hearing something in the background though, so maybe we can walk through the deal and you can tell us what the challenge popped up. Because it sounds like you acquired this relatively easy.

I did, yeah.

Okay. What type of deal is it?

It was an expired.

Okay. So expired listing. What type of deal did you end up structuring with this gentleman?

An AO.

Okay, so I know we have a lot of new people on here. So in a sign-out or an AO deal, it's basically assigning a lease purchase contract. Once you have qualified the buyer, you then help the buyer connect directly with the seller, and you only get one payday on this deal. So it's just a non-refundable deposit. I think the first 10 or 11 deals, uh, that Chris did before I joined specifically were all AOs. Or sign out deals. So a good way to get started, generate some cash. Okay. What was the purchase price on the property?

So originally it was $550,000, but we're at $499,000.

Okay. Is that what you're selling or did you go back and renegotiate?

Oh, sorry. Sorry.

That—

so we are at $549,900 on our end at market.

So $5.99 million, that's what you're selling it for. Hey, everybody say hi to Jeff. Uh, this is Jeff Cody, one of our new apprentices. Yeah, see you later, my man. Good luck with your, uh, event.

Thank you.

Um, okay, so $5.99 million. What did, what did you acquire it for, or what do you have it under contract for?

$499,000.

Got it. Okay. $5,299,000, and then you have $499,000. Okay, awesome. And it's currently on the market, is that accurate?

Correct.

Okay, well, walk us through, Jessica. It sounds like there were some speed bumps or some learning lessons that we all can learn from this. So tell us What else is going on?

Yeah. So I think part of it has just been I acquired this deal right before I went on vacation for 8 days. And I told the seller upfront very much that, I said, I'm going to be gone. I'm not going to be available. I have people helping me cover the buyer's side, but if any emergencies come up on your end, here's somebody that you can reach out to, which I don't think he ever did. But Whenever I got back, he had emailed me that there was a spam post that had been made on Facebook about this home. So he was feeling uneasy about that.

Okay.

And then he was upset because I hadn't gotten a lot of interest in it. And a little bit about that, and Nick fully is aware too. So this, this home was on the market with a realtor for $499,000 and didn't sell. And this guy did a few updates, not very much, maybe $5,000 to $10,000. $10,000 worth of updates and he wanted to sell it for $550,000. And I'm like, that, you know, that's just going to be a little bit difficult. I mean, we can give it a try because with AOs, you know, I mean, I'm always willing to give it a try. But I told him, you know, if people are seeing it, if it didn't sell for $499,000, we're probably going to have a hard time. We might have a hard time selling it, but I don't know. We'll see. The monthly is also very high. So I did talk with him about that too, that the monthly payment was—

What's the monthly?

So originally he wanted it to be at $2,550. $2,550 is what he wanted, but it's currently— it's at $2,450. He dropped it $100.

Okay. And how much of that is taxes?

None. That doesn't include the taxes.

Doesn't include— so it's $2,550 or $2,450 plus taxes?

Right, which I think is about $121 a month or $131 or something like that. Jesus.

Yeah, you tell him, Eric.

Whoa.

Okay.

Sorry.

It's okay. Do you mind mute? Thank you, sir. Okay, so you got $25,000. What's the market like rent in that area?

So there's no rental comps in the area. There's no homes for rent in the area. So I thought that that could be to our advantage. Either way, I knew that the numbers were high, but I told him, we'll try. I'm not opposed to that. We'll take it to the market. And if we don't get anything within the first 30 to 60 days, that probably just means that the numbers are high and the market's telling us that we're too high. So almost instantly when I got back from vacation is when he dropped the price. So he dropped it $50,000, which is why we're at where we are now. And then he also dropped the monthly payment, the $100. So almost instantly he dropped it because he wants it sold quickly. So that's another expectation learning piece on my end. I was clear with him. I told him, typically we can sell homes within 5 to 90, 120 days, but we're just never going to know what that timeline is until we take it to the market and see what buyers Buyers may, may be out there. So I think he's— I'm feeling from him the pressure of wanting to get it sold quickly and being disappointed in how little interest that we've gotten. And then I also had one buyer go out to see the home, and the home is vacant. There's no furniture or anything in there. I told him I was putting a lockbox on the door. I put the lockbox on the door, put the key in there. I sent the buyers to see the home, and he has a Ring camera. So he saw that they were there alone and he did not like that.

Okay. So it sounds like you have a difficult seller that you're working with.

Yeah.

With unrealistic expectations.

Yeah. I think it's just the unrealistic expectations with starting with a very high price. Even though I feel like I had a— I was a little bit more realistic with him than I maybe have been 2 years ago, but I wasn't as honest and realistic as Nick would've been with him or other people, you know, because Anyways, yeah. So I'm learning that upfront, it's more important to be realistic about price and expectations and to set expectations for buyers going into the home and set expectations for the pace that we go and how we communicate. Because I feel like every week he's— and it's only been 3 weeks, not even been that long— he's wanting feedback and he's getting— I feel he's getting upset. That it hasn't sold yet, but it was also on the market for a while too.

Just going to say, we haven't talked about this, but you and I can talk about this. You can have a very candid conversation with them that, hey, listen, we're not realtors. Once I have someone that I think is close that I'm ready to present to you, I'll be in touch. But until then, we're getting tons of activity. We're just continuing to bring buyers to our process. But again, I'm not a realtor. I'm going to give you an update every time something happens or once a week. That's not kind of how this works. Yeah, I've had that exact conversation with sellers before.

Yeah, I think that's a conversation I will definitely have to end up having with him probably within the next week. Yeah, I mean, it's a learning experience. It's not— it's part of the process. And I had just gotten really upset that he got so upset with me. But I really didn't do anything wrong. You know, I just did what I'm doing, what I'm telling you I'm going to do, and I'm marketing it and I have it out there, have signs up all the places. So I'm doing what I can on my end. And that's just what I really have to focus on is what I can control.

For sure. It's definitely a learning experience. I can tell you almost every single deal that we've done, we have some sort of learning experience from it. And certainly are all going to work with difficult sellers for sure. It's going to happen. And then as you build and grow your portfolio, you may choose not to work with unrealistic expectations, or you may not want to deal with sellers like this eventually. But for now, I appreciate your drive and getting after it and trying to make something happen because you have zero to lose. You're just dealing with more of emotional consequences. I shouldn't say only. I mean, it's part of being an entrepreneur, and I know it can be very challenging. I faced the same myself. But you have nothing to lose financially at this point, so you might as well keep pushing forward and see if you can try to make something happen. What is, uh, what's the expected, like, paydays on this deal?

Um, would be around $50,000. Yeah, 50/50 split.

Yeah. Okay, so you bought— you have it under contract for $499,000, you're selling it for $549,000. Is that accurate? Okay, so then you guys both agreeing that the non-refundable deposit is then split 50/50? Is that how the contract works? Correct. Yeah. Okay, so At the end of the day, you could potentially make all of the $25,000 upfront, or you're gonna make $25,000 over the course of the next 24 months.

Yes.

I appreciate you being super vulnerable on this, right? Because usually when we come up with these deals, we're like talking about all the hurrah, right? And all the amazing things. But we— most people are not gonna even host an event like this and say, hey, let's talk about some of the challenges that you face as a real estate investor. So I appreciate you stepping up and doing that. And know that there's a reason why this guy hasn't sold the property in this amount of timeframe, because my guess is other people have tried in some other circumstances and he's probably been like this with everyone. So if you can communicate as openly and honestly with him and get after it as much as you can and be patient with him emotionally as well, I bet you there's a lot of things that are tied to him that's going on that we might not know about. And don't take it personal, for sure.

Yeah, I definitely did. But we've been cordial. It's been, it's been decent communication. But based off, you know, his actions and some things people have said in the chat, just the, the rush, I just based off his— based off the past, I feel like he's expect— he has a lot of high expectations for me. But Yes, I will get with you, Nick, and we can have a conversation. And I definitely will have a conversation with him because I don't want to waste his time and I don't want to waste my time. And if he's not going to be okay with the reality of the situation, then I may not be the best fit for him anyways. Yeah.

And I hesitate to even say that, but I mean, we have nothing to hide. So, yeah, you and I can absolutely connect and we can go over the scripting again. But just so everyone knows that, that's here on this call, we have nothing to hide. Um, that's exactly what we're gonna do and just go over the script. Like, hey, um, not a real— not a real estate agent, not gonna give you an update every, every day or every week. Uh, once we have someone that we like and we brought through our process, we'll, we'll let you know. We'll, we'll be in touch and then we'll present that. But until then, just know that we're still getting slammed with activity. It's getting out there exposed.

Uh, we just haven't Uh, good points, Nick.

I know I saw some people commenting in the chat. If you guys have questions, um, definitely hit it, uh, for sure. Uh, Nicole's saying, thanks, Jessica, as part of the learning. Keep it up. Great job, Jessica. Thanks for sharing all your lessons. Yes, Jessica, great job securing an nest egg for your family, and you get to choose who you do business with. Uh, all great points.